Rain is inevitable.
For those of us in the Pacific Northwest, we know this all too well. However, today I’m not talking about weather, I’m talking about life.
In life, there will eventually be some kind of “rain” (rough patch, emergency, whatever you want to call it). The older generation talks about having a “rainy day fund” for such occasions and most people would call this an “emergency fund.” As advised by Dave Ramsey, we personally keep $1,000 in the bank in case of an emergency. Usually for us, this means when we have to do emergency fixes on our car(s).
5 months ago we decided to purchase a second car so I could substitute teach with more ease. We paid a few hundred dollars and and put a lot of work into it. It’s been running fine, and then this week, I tried to back it out of the driveway and it was like someone pulled the emergency brake. I couldn’t move it without a horrible scraping noise.
I called a tow truck and took it to our mechanic, and he found that the back brakes needed to be replaced, along with our leaking struts. When all was said and done, we had a bill of $1,562.04.
In the past, this number would have floored me. A few months into our marriage we realized we needed new tires for our car. The estimate was a few hundred dollars. I curled up in a ball in the car and cried because our credit card was maxed out and I knew we couldn’t afford it.
Now, because we have our savings, this was more of an inconvenience than a financial (and emotional) emergency. We happened to have this amount in a savings account that we had started for the summer (when our pay schedule changes), so we used that to pay the bill.
I picked up the car (yesterday) and was driving home when all of the sudden I noticed that the battery light was on. I don’t know a lot about cars, but from previous experience, I know that when the battery light comes on you pull over because your car is going to die. Sure enough, I pulled over and the car promptly died.
I called our mechanic again and he towed the car to his shop. This morning he called me and said along with the alternator being dead, he also needed to replace the water pump and timing belt. This would be another $900. I took a deep breath and after consulting my husband, told him to go ahead with the work.
I’ve been reflecting on this experience and the weird thing is that I’ve been very emotionally neutral through it all. It’s been so life-changing for us to have some money in the bank so that when these unexpected (but really expected, we just don’t know what they’ll be) things happen, we can take care of it instead of freaking out.
So, this is my exhortation to all of you who are trying to be frugal: don’t scrimp on the savings. Sure you need to spend money on food, debt, rent and other things, but you should always have a little bit in the bank for when the inevitable happens.
If you take the initiative and make a rainy day fund, when the rain hits, you can pull out your umbrella and sing instead of curling up in a ball and crying.
What’s your personal philosophy for savings/emergency funds?
Leave me a comment below!