Hello Smart Money People,
One of the key elements to peace is knowing that if the ship goes sideways, you have a lifeboat and you’re covered. Enter in the Emergency Fund.
Here are some sayings you may have heard around the proverbial water cooler:
When it rains it pours.
When you thought it couldn’t get any worse?
Up a creek without a paddle.
Misery loves company.
Hope for the best and prepare for the worst.
Well, we’re here to tell you, as the famed basketball coach Bobby Knight said, “The will to succeed is important, but what’s more important is the will to prepare.” Life happens. Tires run over nails, washing machines break with full loads of laundry still in them, AC units die on the hottest day of the year. It happens. What happens next defines how long the emergency will last and if it turns into a crisis.
There aren’t any surprises around the corner on this one. Save $1000 as fast as you can and put it in a savings account that is labeled IN CASE OF AN EMERGENCY.
Let’s define an emergency:
- Flat tire: Yes
- Power outage/ failure: Indeed
- Blocked toilet: a BIG YES
- Damaged roof: Unfortunately, yes.
- Locked out of house or car: Bummer and Yes
- Broken door or window: Ugh, what a pain, holla: Yes
- Gas leak: Get out of the house first, and second > Yes
- New outfit: No
- Dinner with friends: Nope
- New toy for the kiddo so they will be quiet in the grocery store: Unfortunately No
- A one-time only infomercial deal that expires at midnight (much to my chagrin): No
The outfit one is a little rough and could be disputed by a good litigation attorney, but in this house, it is a “NO”. However, I will be writing soon on the categories of where to spend and that provides relief. Coming soon.
When a $500 event happens unexpectedly and you have $1000 in an account set aside SPECIFICALLY FOR THAT EMERGENCY what happens is the emergency goes away as soon as it began.
TIP: If you are single, have an accountability partner. If you are married make sure you agree on the emergency. I have often felt that a one-time only sale, with free shipping AND the sale is ending at midnight was a legit emergency. These “emergencies” would commonly happen when I am traveling for work and glued to the television watching an infomercial. I am completely and unapologetically sucked in. I mean, who doesn’t want flat abs from twisting side to side for only 10 minutes a day on something that looks like a skateboard without wheels, huh? I DO.
Back to the point:
When we plan, we have more effortless successes and your nerves aren’t as edgy as they are without the emergency fund. For all of the things Bill and I do and how we spend and invest our money, every once in a while, I will say “our emergency fund is still in place right?”
Knowing that this money stash will bring you peace and comfort you will notice less “emergency” stuff happens. (See saying above “when it rains, it pours.”)
To conquer fear is the beginning of wisdom ~ Bertrand Russell.
You CAN DO THIS!!
We are cheering for you!!
Karen and Bill