Travel Fund before Emergency Fund…what?!

April 8, 2009 · 10 comments

I’ll be the first to admit it, I’m kind of a blog whore and if your reading this, then chances are, you’re equally whorish. One of the things I find myself particularly drawn to on other PF blogs is the progress bar, much like the one on the upper right corner of this page. It’s a tiny snapshot of that bloggers financial soul. It’s always interesting to see how much debt someone is working to pay off or how much cash they have in their savings account. I like making goals for myself and progress bars allow me the opportunity to see what my fellow bloggers goals are. Progress bars are legit, what’s not so legit is the breakdown of some of these bloggers priorities, especially considering they are personal finance bloggers.

I’m perplexed as to how PF bloggers can have their “fun” progress bars (ie travel fund or new car fund), contain substantially more money than their debt payoff, emergency fund, and savings account bars. I don’t know what to do when I see a PFers travel fund have $3,500 in it and their emergency fund have$30.50 in it. It makes me wonder if their financial priorities are in order. Is it not hypocritical to write about the importance of fundamental financial knowledge, only to have your own website display such a large gap between the necessities (emergency fund) and extras (travel)? Maybe having an emergency fund doesn’t qualify as a fundamental financial principal and is more of a best practice? No wait, that’s ridiculous! Having some kind of emergency fund should be one of the first things we do as we fight to gain our financial freedom.

So to all you PF bloggers who have skewed priorities I’m challenging you to a blogging duel. Please explain or justify the logic behind your actions. Am I crazy? (don’t answer that)


*p.s. this tif is only towards those whose blogs contain financial advice for their readers, if your blog is not about money or only about your life than this is not directed towards you :)*

{ 10 comments }

1 Dolly Iris

Well, maybe you are not familiar enough with the blog to understand why their goals are set that way. For instance I am moving to Australia for a minimum of one year. I have to have at least $5000 in savings before I can apply for a work visa. I have to apply in June or July. So that goal is a priority for me. I leave in October which gives me the months in between to make up my other priorities for savings. I have a stable job and so does my spouse. My blog doesn’t reflect his savings, only my own. All of my money went to debt before January 09 so this money has all been saved in the last three months. Hope that clears the fog a little! :)

2 Nathaniel Christopher

Hmm… I think you raise a valid point. But different blogs have different purposes.

Some people want to give helpful advice, others want to moralise about the importance of fiscal responsibility and others just want to give a candid, real account of their day to day life as it pertains to money.

After years of hard, grueling work in shitty retail jobs the idea of saving up to move to move to a new country can be one heck of a motivator.

P.S. Great use of bold and italics! ;)

3 Punch Debt In The Face

Dolly- You are becoming my blog BFF! I totally agree that I probably do need more insight to each bloggers personal situation. I was speaking in generalities and obviously there are exceptions to the rule. And you my dear are one of them!

After your explanation it totally makes sense why your progress bars are funded the way they are. I think you and I simply differ on what we deem “travel” and what we call an “emergency.” I probably would have included your Australia trip in my E-Fund because it is a future expense that you know you are going to incur. To me, it would be no different that if I knew I was going to have to change the brakes on my car, future inevitable expenses are what my E-Fund is for. Ultimately the goal would be to have a “savings” fund that expenses like this can come from so the E-Fund can stay relatively full, but in your case saving for Australia is a significant pending issue.

Thanks for poking in again and I look forward to future comments from my BFF!

4 asgreen

I would be curious to know which blogs are like this? I also use the sidebars (and love them btw), but I think I would freak out if I had more in travel than in my e-fund!

5 Punch Debt In The Face

Asgreen- They are out there. I did not think it would be fair to include links to their blogs however, as I am unfamiliar with their situation or goals, as Dolly Iris point out above :)

6 DogAteMyFinances

My bars aren’t even about debt anymore — but I’ll need that e-fund because I got laid off. Does that mean I won the duel?

7 skeeter319902

I think you need a goal in your E-Fund (sounds so modern!) before you start your travel fund. Everyone’s goal will be different ($5k, $10k, etc) but if you have that and then start saving for the travel fund, travel is so much more relaxing. At least that’s what I’ve experienced. Sometimes saving for both at the time is rewarding as well. Now that I’ve reach my savings goal, I haven’t stopped, I just now channel money to two different places: vacation and emergency fund.

8 Anonymous

Kind of reiterating what Dolly Iris says, I think it can depends on how loosely the term “travel fund” is used.

Say, for example, I have to travel to attend my sister’s wedding. I can’t not go, and I can’t tell her “no, wait, don’t get married until my emergency fund is completely funded!” So, I’m putting aside money every month in a “travel fund” for these expenses so that I won’t rack up debt or dip into my emergency fund to make ends meet that month.

In reality, it’s all money/savings and I think most people would have few qualms about dipping into if a real emergency demanded it — it’s just a way of mentally earmarking certain pots for different purposes.

9 David

I'm guilty of doing that (but not by as much as your example… I have $1200 in my vacation fund, $700 in the emergency.

Here are my reasons (in no particular order).

1) I can always use my vacation fund as an emergency fund in case something comes up. I won't be taking a vacation until the end of the year at the earliest, which should give me more time to build up my emergency fund (although my vacation fund would probably still have more).

2) It's nice to have a light at the end of the tunnel to motivate you. Unfortunately, it takes a while to turn your finances around, even after you've started making the right choices.

Each month, I've been paying down lots of (interest free) debt – probably $1000 a month. I'm working hard on my improving my finances so I can enjoy life more. Taking trips is something I greatly enjoy (and the wife even more so than me, if that's possible).

Having something to look forward to is a great motivating factor, especially when that initial rush wears off, and you're left thinking about how long it's going to be before you can actually reap the benefits of your hard work.

3) I've been increasing the amount of my emergency fund deposit by 10% each paycheck (twice a month), while my vacation deposits stay the same or decrease. Probably within two or three months, I'll be putting more in my emergency fund anyway.

4) I know it's not the ideal or perfect thing to do, but I'm trying to do make changes that are sustainable, while allowing myself to do the things I truly enjoy.

I could be wrong, but I think it was Ramit Sethi that suggests cutting spending mercilessly in areas you don't care about, but keep spending on the things that truly are.

I've been really cutting back on my spending, and have even starting saving for future expenses with an accrural-style budget.

If I'm meeting the rest of my goals, and am not paying any interest on my credit card debt, then I don't see why I can't take responsible vacations (meaning I pay in cash, and nothing is sacrificed for me to pay for it).

10 eemusings

I've seen the same thing quite a times and always wondered what was going on there!

But I think most of them were just on random blogs I stumbled across a couple of times, which I didn't follow and I didn't read up about their situation.

If it's a matter of defining "travel" or being willing to tap it in case of a real emergency then that makes perfect sense to me :)

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