But it has been bothering me that in our zeal to pay off the cars, we don’t really have any extra money put away for emergencies. Our bank account is not completely empty every month but nothing is really set aside either. We had a small stockpile in April but sadly Uncle Sam took it to pay for taxes. We didn’t manage our tax bill very well last year. This year will be much better.
The company I work for is feeling the economic pinch just like everything else. This too has been bothering me as being unemployed without an emergency fund is not somewhere I wish to be. As a result of the economy, they have temporarily ceased matching our 401k contributions. This certainly reduces the attractiveness of sticking vast amounts of money into this very non-liquid asset. Since the attractiveness has worn off of this investment, I have reduced my pay-in to 1% and the amount that my pay cheque is increased is going into a savings account. I am a little floored by how little my pay cheque has increased due to taxes being taken out. You really do get a lot more to invest in your 401k before taxes. Contributing to a 401k really is a great investment strategy but not at the price of your financial fitness being out of whack. So we have shifted our priorities temporarily and I will be keeping track of our Emergency Fund funding on the blog. I encourage everyone to think about putting a little bit of money away for emergencies.