How Not To Retire By 40 – Part II: An Ode To Emergency Fund

This post was included in Carnival of Personal Finance #299: The March Break Edition as one of  the Editor’s Picks!

Family History

I was raised by my mother and my grandmother. An emergency fund was non-existent in our family. I don’t think that growing up I even understood what it means. Neither my grandmother nor my mother discussed family financial matters with me. Even when I graduated from the University and got my first job, no one ever told me: save up Aloysa, spend less than you make, think about retirement.

Our family never had savings, and in case of an emergency my mother or grandmother would ask friends to loan them badly needed money. Somehow their friends always would have money to loan… till the payday.

My mother and grandmother were teachers. Teachers were not paid very well in the Soviet Union, and it was not easy to run a household full of women. In fact, I am not sure anyone was paid well back then unless they belonged to the communist party, KGB or worked in the defense ministry. However, there were always people (like friends of my mother’s) who always managed to have savings.

Historical Background

Ironically, it was considered shameful to be rich in the USSR (the rule never was applied to the communist party members.) People who were better off were frowned upon and could easily become a subject of KGB investigations. Those people had to hide their wealth and money. Sometimes I wonder if habits of hiding money in socks, pots, books and under mattress came from that time.

The Revolution of 1917 that eventually led to the creation of the Soviet Union was built on the hatred  (as so many other revolutions in the world) of rich and powerful. I know it is a pretty simplistic and unsophisticated way to look at it (there was so much more to the causes of the Revolution than that), but I don’t want to go into a detailed history lesson. This post is not about that.


We lived from paycheck to paycheck, and sometimes we wouldn’t manage even that. Thankfully, there was no credit system in the Soviet Union. It scares me to think what would happen to the majority of people if there would have been one. Friends who were a little richer, a little better off were our lifelines. We could not build any emergency fund because there was nothing to build it from.

It was one of my friends here, in the US, who told me once that it was always important to have some savings build up because “you never know what life will throw in your way.” She was also the one who introduced me to the notion of “spending less than you make.” She was very frugal. Sometimes to the point of being plainly cheap. But there was a  good reason for that. She was building her savings account because she was preparing to run away from her abusive husband. She was a powerful saver who managed to put away enough money to get herself out of the marriage by simply cleaning houses twice a week. 


It took me years to realize how important an emergency fund is in one’s life. Without it, you sink deeper and deeper into debt. Without it, you are not a free person to live your life. You are a slave to circumstances. I’ve been one for years and believe me, it is not a pretty picture.

Credit cards, personal loans, banks let you down, but emergency fund never does. Emergency fund is stronger than anything you can ever accumulate. It is stronger than time (depending where you keep it.)

Its strength holds you together when nothing else can.

16 thoughts on “How Not To Retire By 40 – Part II: An Ode To Emergency Fund

  1. Moneycone

    Wow! What a fantastic post Aloysa! I love the line ‘You are a slave to circumstances’. So true! We all should hope for the best, but prepare for the worst.

    Thanks for sharing Aloysa! I never imagined life was so hard in the Soviet Union!

    1. Aloysa Post author

      Thank you very much! I wrote how I felt and I think this line just came out natrually.

  2. retirebyforty

    Wow, great story. I love your quote as well. “You are a slave to circumstances.” That is so true. I wonder how life in Russia is these days. They must have more credit now. Isn’t Moscow the city with the most millionaire in the world now? Rich people probably don’t have to hide money anymore these days.

    1. Aloysa Post author

      Yep, Moscow has the most millionaire in the world. It is also the most expensive city in the world. Corruption is big. Credit is available. Life is dificult. I think that the middle class does not exist there any more. Which is very sad…

  3. Melissa

    I grew up in the U.S., but my circumstances were the same in that my parents never saved money (they didn’t make that much to begin with), and we had to rely on others for an emergency fund. Like you, I was never really taught to save. I was taught how to stretch a dollar to make ends meet, but not to save.

    Reading about what Russia was like when you lived there is very interesting. So glad you are back to blogging!

    1. Aloysa Post author

      To know how to strech money is also a very useful skill. Add saving on a top of it, and you get a golden combination! 🙂
      I am glad you enjoy my stories. Means a lot to me!

  4. IPA

    Great post Aloysa! You made me think about my grandparents, who fled Lithuania when Russia invaded, about how they lived their life here in the US. After my grandmother passed away my dad and his siblings were surprised as to how much money she had stashed in various places. They found a large amount of money and they had no clue their parents had that much money stashed away. They lived like they were still in Lithuania as they probably spent one penny for every dollar they earned. I wish I lived that way when I was younger and am now starting to realize the importance of saving. Good thing for tax refunds as we now have $1,000 as an emergency fund.

    1. Aloysa Post author

      Very interesting… I think immigrants still tend to stash away money in different places instead putting it in a bank.

      Tax refunds come in very handy. I love them! 🙂

  5. First Gen American

    My least favorite thing about that communist era was that all people didn’t want to be equal and people found ways to get ahead through the black market or by lying, cheating and stealing.

    Did you ever have those ration stamps? You could only by so many stamps of sugar, etc? I remember people used to trade those things like currency.

    Thanks for sharing your story. It took me years to have a decent emergency fund, but I hated being in debt more than I hated not having cash, so I lived paycheck to paycheck and put all the extra towards loans. I was fortunate to have been employed this whole time, so I don’t regret the way I did things, but If I were just now getting out of college, I think I would do things a little differently.

    1. Aloysa Post author

      No we didn’t have ration stamps. I remember that there was time when all we could afford to eat was noodles. Since then i hate noodles or any kind of pasta and eat it very rarely.

  6. Ken @Spruce Up Your Finances

    Very nice story Aloysa. It’s nice to read interesting history lessons from someone’s personal experience. Thanks for sharing.

    We also try to have a decent amount of emergency fund and the goal is to have at least six months in case of situations like job loss, health or disability.

    1. Aloysa Post author

      I am trying to build 3 months right now. Then we’ll go from there. It is not easy but doable. I hope… 🙂 Glad you enjoy my short history lessons.

  7. 101 Centavos

    That’s a worthy story, Aloysa. It’s good that you learned from your friend about the need to plan ahead to deal with whatever life throws your way. Some people never learn.

    1. Aloysa Post author

      Yeah, she was the one who actually showed me that saving should be an everyday thing.

  8. Lindy Mint

    It’s interesting the survival skills your family had to cultivate in that environment. Asking friends for money is certainly a skill in my book.

    1. Aloysa Post author

      I never asked my friends for money (and hopefully I won’t.) I awalys thought that if you want to lose a friend, then ask your friend to give you some money. 🙂 But it is definitely a survival skill.

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