It was dark. It was cold. We were stranded.

After Christmas, Holly and I took the girls on a beach vacation to Puerto Rico. Holly had been there before and couldn’t wait to bring the rest of us for our first time. As “mommy” had before us, the girls and I fell in love with the island. The weather was great, the beaches were pristine, and the scenery was incredible.

We started our journey by renting a VRBO in a residential area of San Juan. We took a day to explore Old San Juan, bringing the kids on a walking tour of the historic area. My seven year old dutifully jotted down notes and passed the quiz we gave her after the tour, earning both girls some well-deserved ice cream.

After a few days in San Juan, we rented a car and headed east to Fajardo. We took some time to drive through El Yunque rainforest before reaching our destination – the El Conquistador Resort & Spa. The resort is absolutely beautiful! (It’s probably Holly’s favorite hotel in the world, and she’s been to a LOT of hotels!) We spent our mornings on the beach/private island, our afternoons at the on-site water park, and our evenings enjoying each other’s company at dinner or in the hot tub. It was great family time and we loved every minute.

It was cold. It was dark. We were stranded. Thankfully, we didn't have to panic about the financial implications of our car dying. Here's why.

All Good Things…

All good things come to an end, and we had to make our way back to the states. Because these flights cost almost half as much from Chicago, we made the 3+ hour drive to O’Hare International Airport before leaving. After landing back at O’Hare, we made our way to the car, jumped on the road, and headed for home.

After about an hour, the kids started getting hungry. So, we pulled off to grab a bite and fill up the tank. Everything was going well until…

… our car died on the side of the freeway. Like, DEAD dead. Like “wouldn’t start at all” dead.

I got out, took a look, and had no idea what was wrong. By this point, we’d been parked on the shoulder – in below zero temperatures – for about 10 minutes. The heat wasn’t working, and everybody was getting cold and scared. So, we dialed 911. The state police arrived in about another 20 minutes to help us out.

Stranded a few hours from home, we booked a warm hotel for the evening. After having the car towed to a dealership, we waited until morning to learn what was wrong… and how much it would cost.

Long story short, I’d filled up with bad gas. The repairs were going to cost about $700, plus we had the tow charge and hotel to pay for. This definitely was not in our monthly budget.

Luckily, we didn’t have to panic. We were prepared. Regardless of whether we’d get reimbursed or not, we had the money to front the expenses. This is exactly why we always keep a fully stocked emergency fund.

What is an Emergency Fund?

An emergency fund is one of the three most important financial tools in your arsenal. (Your budget and expense tracker are the other two.) Put simply, an efund is a stash of money saved for handling surprise expenses. Think of it like an insurance policy for your budget. It protects your money from the unexpected. As such, an efund should be kept separately from your other savings and ONLY be used for emergencies.

Not preparing for emergencies is a HUGE reason so many Americans struggle with money. Here’s the thing: Shit is going to happen. We already know stuff comes up, things break, and we’re going to face money challenges we didn’t expect. Still, 69% of Americans surveyed have less than $1,000 saved for any purpose. That’s crazy, and it’s killing our financial health.

If you’re struggling to win with money, building an efund can mean the difference between success and failure. It supports you when times are tough, protects you from surprise expenses, and helps break the constant cycle of falling behind. If you don’t have an emergency fund already, start building one NOW! Seriously, it’s that important.

How to Build an Emergency Fund

So, how do you build an emergency fund? Easy…

  1. Create a line item in your monthly budget to save 10% of your take home pay for emergencies.
  2. Open a high yield savings account to hold your efund money.
  3. Keep saving until you reach $1,000 in the account.

Your goal is to build a “beginner” emergency fund that’s stocked with $1,000. This acts as a great cushion against emergency expenses. Eventually, you’ll want to save 3 to 6 months’ worth of expenses in your efund. A safety net this large will help you through even the toughest of times – like job loss, illness, and more. With that said, focus on saving the $1,000 beginner fund first.

HOT TIP – Keeping your efund separate is really important for making this work. That way, the money feels “special” and doesn’t get spent by accident. Using an high yield online savings account is perfect for this. The money stays separate but is readily available when you need it. Open your emergency fund with only a $100 deposit here.

Final Thoughts

In the end, everything turned out OK for us. It was scary, it sucked, but we all made it home safely.

Once again, our emergency fund saved the day. From water heater leaks to furnace repairs, our emergency fund has kept us “on budget” for years. Although we’re being reimbursed for some of the car repairs, we never had to panic or use debt to cover the costs. That’s why we continue to consider our emergency fund as a fundamental part of our financial plan.

Whether you’re saving for travel or budgeting for bills, an emergency fund is essential for keeping your head above water. You already know unexpected expenses will occur. Prepare for them before they happen. Start your emergency fund NOW!