Why $1,000 is the Perfect Amount for a Starter Emergency Fund!

The $1000 starter emergency fund is all over the internet. I first heard about it from Dave Ramsey, but I see and hear about it all the time in the personal finance world.

I want to be clear, I’m not talking about the traditional emergency fund where you would have four to six months of expenses tucked away. This “starter” emergency fund is in place while you’re tackling debt. You’re putting everything you have towards your debt using the snowball method (also Dave Ramsey) and the only “extra” money is this $ 1000 starter emergency fund sitting in a savings account.

There’s some debate across the interwebs about if this $1000 is enough, or too much. I wanted to give my take on why I think the $1000 starter emergency fund is just right.

We lived by this principle throughout our entire 26 months of debt payoff. And it served us perfectly.

Throughout our time of debt payoff, we never had an emergency that we had to pull out a credit card for! It was miraculous and also a reassuring confirmation that we were on track with the way God (the Universe, enter your Source Energy here) intended us to treat money.

Being in a place of readiness for emergencies and also taking care to manage the inflow and outgo of our personal money, allowed us to always be able to cover emergencies that came in. Even if the car repair was over $1000, we could cash flow the rest by restricting another area of the budget and reallocating monies.

We still use our money in this way. The difference is, now we often just “absorb” a $1000 emergency into our working budget by reallocating funds from one envelope to another. Sometimes we transfer money from our traditional (4-6 month) emergency fund into our working budget to cover the excess. When we need to use our emergency fund, we work the next month to pay it back before moving forward on any other financial dreams.

If you’re within your debt payoff period and trying to do it without that $1000 starter emergency fund I encourage you to stop right now and save up that $1000.

Here are 5 reasons why I believe that the $1000 starter emergency fund is the perfect amount to get you through your debt payoff journey!


And a little bit of fear is healthy.

$1000 isn’t really all that much, so it inspires action to reach your goal so that you can go for that much more cushy emergency fund afterwards.


$1000 isn’t a LOT, but it’s usually just enough to help you make it through whatever emergency arises without racking up more debt. If your emergency is more than that $1000, usually you can cash flow the rest by limiting your non-fixed expenses for the month.


If you live on a strict budget, do a no-spend month (or no spend 6 weeks even) you can likely save up that $1000 in 4-6 weeks. It’s a super quick win and then you can move onto your bigger dream of paying off your debt! It’s super attainable and will help you to feel like you’re actually moving the needle. Because you will be!

Don’t underestimate the importance of mindset in this process. If you see that you’re actually doing what you set out to do, you’re much more likely to continue.


Like I said earlier, don’t underestimate the importance of your mindset.

I remember being in that place of feeling like there was never enough. We never had enough to do the things we wanted. We believed that we were constantly lacking.

The truth is, though, when we started living on a budget and tracking where our money was going and became aware, we found that we actually had more than enough! We were just not managing that money in a way that made it enough.

Start taking action steps, like saving a $1000 starter emergency fund, that will reinforce the belief that you have enough. And then believe you have enough. Soon you’ll notice you WILL have enough.


In case you haven’t noticed, adulting is expensive and things ALWAYS happen. Life is much more fun when you’re prepared, rather than having to react out of fear or lack. What I mean is, I don’t get sucked down into the depths of despair when something big hits us, because we’re ready. Not really “ready,” but financially ready.

Having money in place to help you cope with an emergency makes it SO MUCH EASIER to see the lesson through the tough stuff. So, we’ve found that $1000 was just the right amount during our debt payoff journey to feel like we were ready for that emergency, but also uncomfortable enough to have us working as hard as possible towards that bigger dream of debt freedom!

You got this friend.

I promise that $1000 actually isn’t that much out of your budget. Have you seen what you spend on Target runs and eating out?! Or was that just me?

Even if Target isn’t your weak spot, I know there’s money you can free up and sock away each week to get you saving your very own $1000 starter emergency fund in no time!

Always, always rooting for you,

DebtOlivia Zurawski