The axiom in financial planning is that before anything else, one ought to save up 3-6 months worth of savings in case of emergency. In reality, I know that most people are unable to do so and it’s a sad state of affairs when the average American is unable to save even $1,000; which again, I feel a tremendous amount of sadness and even guilt over. Life is hard and some times there are circumstances that prevent people from being able to get control of their finances (whether job related, family related, etc). I just hope that somehow our policy makers are able to devise a strategy where we can go back to the good ol’ days (though that, too, often tends to be overly romanticized).
In any case, I’m fortunate to be in a field where I am able to make the money that I do. However, when I first started as a CRNA, I didn’t have much for savings. I started my job at the beginning of the year. Rather than slowly build my bankroll over a period of months, I went online and changed my tax withholding to 12 in order to receive the full amount of my paycheck. I did this for 3 pay periods (for an approximate total of $20,000).
Afterwards, I changed my withholding to 0. Did I owe at the end of the year? Surprisingly, NO! I ended up breaking even as a W2. However, because I also added 1099 income, I was able to itemize many expenses and ended up getting back a $2,000 refund!
Anyways, I believe in having an emergency fund and hopefully as a newly minted CRNA or an aspiring one, you too understand the importance of having a safety cushion because when you need it, you really need it! I don’t necessarily recommend my strategy, but if you’re looking to quickly build up your cash reserves, this is one strategy.
Another thing to think about with regard to a savings fund and again, I only recommend this to individuals who have great self-restraint and discipline along with great credit, there’s always a credit card!
Let’s say you run into a life issue and need to come up with some serious cash. There are credit cards out there (like Chase Slate) that allow you to balance transfer money without having to pay the balance transfer fee. More importantly, it’s a 0% APR for 15 months, effectively giving you a free loan if you can pay it off within the 15 months. This isn’t a bad strategy to employ if you’re someone who knows how to manage his/her money.
If the idea of housing $20,000 in your bank account is unsavory due to concerns of inflation eating into your balance, maybe save $10,000 and have a Chase Slate card as a backup.