I always knew that the first year that I would be home full time was going to be a year of "educating" myself about living on a budget, living frugally (not cheaply) and learning to get real about how much money we actually need to live on. When you make a drastic change in your life, you know that there are going to be ups and downs, times when you may want to give up and there is going to be a learning curve along the way. I just looked back over this last sentence and I think I just described parenthood.
Our emergency fund is at zero. It makes me uncomfortable. I guess that is the bad news. The good news is that we can live on my husband's income and there is enough each month to set aside for savings. We just have to start all over again.
I like to watch Suzy Orman and I do believe she gives great advice. There is a segment on her show called "Can I afford that?" I know that last year when I lost my job and decided to stay home permanently that she would have denied me if I would have asked her if I could afford to stay home. First of all she would have said that we don't have an 8 month emergency fund. Saving up 8 months of living expenses for an emergency fund is unrealistic. I understand where Suzy is coming from in that with high unemployment it takes a lot longer to find a job if my husband were to lose his job and 8 months in savings to cover living expenses for that period of time is prudent.
I was losing my job, we had saved as much as we could, I didn't want to look for another job and I saw an opportunity to be home full time.
So here we are starting an emergency savings fund all over again. I'm just happy that each month we have the money to pay our expenses, pay extra on debt and put some money in savings. I keep looking to one year from now when we will only have our mortgage and a car payment as debt.
In the meantime I continue to educate myself as to ways to live more frugally and to enjoy my simple life.