“Emergencies” Happen A Lot More Often Than I Ever Thought
I’ve spent a good portion of my adult life without anything I would call an emergency fund. Although I had saved some money in a retirement fund, I didn’t have anything to speak of in a savings account that I could easily access, and honestly, even though I thought I “should” I didn’t really think through why I should. Therefore, it wasn’t really a priority for me, and therefore, I never got around to it. And, if I *really* needed some money, I could just use a credit card, right? I wasn’t anywhere close to my limit of available credit, after all, even at the height of my indebtedness.
Well, of course, I changed that way of thinking, and stopped considering my available credit as money I had available to spend just in case. And once I started seriously budgeting, for the first time, I started to realize how often things come up that could be considered, to the unprepared, an emergency, and how often one might tap into credit if they don’t have anything saved to deal with life’s ups and downs. Besides the major expenses this past year of the car engine and the furnace, we’ve had the car’s ignition break, a problem with the alignment that caused the tires to wear unevenly and need replacing, our water meter froze and cracked, we had the spring in the garage door break, my parked unoccupied car got ran into in a parking lot… and those are just the things that spring directly to mind. Happily though, we’ve only, so far, had to raid the emergency fund once, and it has been replaced. But without an emergency fund, these were things I put on my credit cards. Thinking of it that way, it isn’t hard for me to figure out how we managed to slip into so much debt without even really noticing.
Life has a way of throwing you curveballs when you least expect them. As I hear all fall when watching my favorite sport - the best offense is a good defense. Hopefully we’re learning how to have a good defense. Only time will tell, but we’re at least on the right track. And we’re prepared for the furnace replacement on Thursday. Without the panic that accompanied the last time I spent more than $3000 on a single item, even. Progress not perfection, after all.
If you enjoyed this post, make sure you subscribe to my RSS feed!
Related entries for your reading pleasure:
May 6th, 2008 at 9:41 am
I completely understand where you’re coming from. I panicked when I thought I was going to have to get another car last week. Thankfully, it was a free repair of a $2 part. But, that emergency fund hasn’t had to be tapped yet. *crossing my fingers*
May 6th, 2008 at 11:57 am
You are so right!
] goal was, for example, set aside enough to replace a car every 8-10 years, to replace appliances every 15 years and so forth. Repairs were to be covered by this fund, then replenished. I even tried being OCD and factor in the cost of -say- one repairman visit per year. We’ve never seemed to have enough based on those projections, which is why we get left scrambling when the EXPECTED happens. Oh well.
In fact, instead of an emergency fund item, long ago I had to reset my thinking to anticipate and project maintainance/repair expenses. Not that i was successful at doing so, but in theory, there was to be $ set aside knowing that all mechanical items would need to be repaired at some point, and replaced ultimately. The [imagined
This also was on our mind when we started setting aside heavty amounts in an FSA. We KNEW there would be big medical expenses this year and allocated enough to cover. THAT we managed to do, and it’s working.
Saving for the rest, unfortunately, we’re not in as good shape as you.
Congratulations on being prepared!
BTW, hate to bring this up, but when we bought our home we got all new appliances, including a furnance, and EVERY single one of them went kaput within a year of each other (at the 16 year mark). Sheesh.
May 6th, 2008 at 12:14 pm
Hi, Came across your outstanding website when doing a Google search to inspire me to start my own debt blog. I have truly been inspired by your articles and your title is absolutely ‘right on’. That is so true - we end up paying 2-3 or or more times for an item due to the rising finance charges. You are so fortunate to have been able to set up an emergency fund. I am not at that point yet. Thanks for sharing your experiences. Emily!
May 6th, 2008 at 6:44 pm
this post was very timely for my situation. My wife and I have saved up a bit of an emergency fund, and 3 weeks ago she had a medical emergency that meant she would be in the hospital until today. It was totally unexpected situation for an otherwise healthy 27 year old.
If we hadn’t been prepared and had health insurance, along with an emergency fund to pay our deductibles, we would have been in a world of hurt. In the end I expect all her treatments will be in the hundreds of thousands of dollars(one estimate someone gave us).
So if you’re not sure if you should start an emergency fund (or get health insurance), don’t delay. Your emergency may be just around the corner like ours was!