Can I get by with a mini emergency fund?

  • Be prepared: a $1,000 emergency fund should be your first big goal, says Dave Ramsey (File image)

    Be prepared: a $1,000 emergency fund should be your first big goal, says Dave Ramsey (File image)

Dear Dave,

Iím 26 and single, and I have about $35,000 in credit card and student loan debt. Iím only making $20,000 a year right now, but I expect to be making almost $30,000 soon. Under the circumstances, can I get by with $500 in my emergency fund, or do I need to have $1,000 set aside like you recommend in Baby Step 1? Iím worried about keeping up with bills while saving money for my starter emergency fund.


Dear Thomas,

I know it will be tough, but a $1,000 emergency fund should be your first big goal. Also, if youíre not already doing a monthly budget ó and spending every dollar on paper before the next month begins ó start doing it now. Living on a budget will help you control your money instead of allowing a lack of money to control you. Thatís how you can keep up with the bills while you save that first $1,000.

Letís say you know youíll be getting two $750 paycheques each month. You go ahead and plan out how to spend that money before you ever get it. Take care of necessities first. Iím talking about food, clothing, shelter, transportation and utilities. After that, make sure youíre current on your debts. Once those things are out of the way, pump every spare dollar you can into your emergency fund. And remember, limit your spending to necessities only.

Start working on that now, Thomas. Itís very important. Remember the old saying about Murphyís Law, and how anything that can go wrong will go wrong? If you keep living without a plan and no emergency fund, Murphy will hunt you down.


Dear Dave,

My husband and I are in our twenties, and we work for the same company. Weíve been thinking about going back to school and finishing our degrees, because our employer is willing to pay for up to 10 credit hours, plus books, per semester with no strings attached. My parents think we should get student loans instead, so we can finish faster. We both have less than two years to go to complete our degrees, so what do you think?


Dear Janet,

Wow, this is a fantastic opportunity! How many times does someone offer to pay for a college degree with no financial strings attached?

Iím sure your folks want whatís best for you, but the truth is you probably couldnít take more than nine or 10 hours per semester, work full-time jobs, and keep your relationship and your marriage healthy. If youíve both got less than two years of school left, itís not going to take that long, anyway. Youíre still young and have plenty of time to make this happen.

I donít think your parents mean any harm, but theyíre wrong on this one. Iíve got a feeling theyíre like most people in America today. Theyíve spent most of their lives swimming in debt, and theyíve reached a point where theyíve just accepted it and think thereís no other way. To me, thatís sad.

If you and your husband really want to finish your degrees, Iíd say the two of you need to march into work tomorrow morning, and take advantage of that wonderful offer. Stay away from debt!


ē Dave Ramsey is CEO of Ramsey Solutions. He has authored seven bestselling books, including The Total Money Makeover. The Dave Ramsey Show is heard by more than 16 million listeners each week on 600 radio stations and multiple digital platforms. Follow Dave on the web at and on Twitter at @DaveRamsey

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Published Oct 26, 2019 at 8:00 am (Updated Oct 25, 2019 at 6:25 pm)

Can I get by with a mini emergency fund?

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