Tag Archives: emergency fund

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.