My husband's PC suddenly gave up on him a few days ago, giving off an ominous and high pitched "eeeeeeeeeeeeee" sound, and no amount of whacking or coaxing could get it to work again. That's the PC where he spends hours hunting and shooting down German soldiers and zombies, but it's also where he works on his projects and websites. In short, it was time to dip into our emergency funds to get a new motherboard and other what-have-yous for his down and out PC.
I started squirreling money away in a separate savings account a few months back, so we had more than enough to cover the expenses needed for the new parts and repair. I dread to think what would have happened if we didn't have emergency funds, I would have to charge the expenses to my credit card and then have to go through some creative juggling of our monthly budget to squeeze out the money needed for his PC repairs. Or I would be paying off the repairs in several installments, with a hefty 3.5% interest fee per month for good measure.
I try to stash at least Php10,000 per month in our emergency funds. At first, I thought that Php10,000 per month was too much and that it would cripple us financially, but when I started analyzing my credit card statements, I realized that I was guilty of too much impulse purchases. If I stopped buying new shoes, books and clothes every month, and I add the monthly bonuses I receive at work, I'll have more than enough to cover my Php10,000 monthly goal.
Here are the things that worked for me in building up our emergency funds:
1. Never go to the mall without a definite plan in mind. The more I roam the mall for fun, the more I'm bound to come out with random and useless purchases;
2. Set aside monthly bonuses and earmark them exclusively for emergency funds; and
3. When other bonuses are issued, earmark a huge chunk for emergency funds.
Another method I followed back in college was to set aside whatever was left of my daily allowance. After the week, I would have Php200-Php300 which I would then use to buy some random stuff. I wasn't into saving money back then (obviously), but I think that that's still a good game plan, however, instead of spending what you save after every week, to dump them in a piggy bank until the amount becomes substantial enough to deposit in the bank.
Again, thank goodness for emergency funds!