There was a day that I was completely broke and had an average bank balance of $4.13. It was awful living with no margin. Anytime an issue cropped up, we had a problem AND a money problem.
One of the best things that Jenn and I did was save money into an emergency fund. What can the money be spent on? I am not sure … I have NEVER spent the money! Seriously, in over five years of having an emergency fund, we have never spent the money.
Did I have an emergency? Well, others might have called them emergencies, but the Sangl household did not. Let me list just a few of the events that have occurred.
* Jenn had major surgery that blew up the $2,300 insurance deductible.
* Ten months later, Jenn had to have the surgery AGAIN. AND it was in another deductible year.
* Power steering went out on the car.
* Transmission went out on the truck.
* The dryer died.
* Huge leaky roof problem.
* I had hernia surgery that blew up the $3,000 insurance deductible.
The Sangl household did not use the emergency fund for ANY of the above expenses. Why? Because they are not really emergencies!!!
Think about it this way.
* Is it a surprise that humans get sick and need surgery? NOPE.
* Is it a surprise that cars break down? NOPE.
* Is it a surprise that an appliance breaks? NOPE.
* Is it a surprise that roofs will leak? NOPE.
When I really think about it, I am not sure we will ever use the emergency fund but it is incredible knowing that it is there!
I wonder if HAVING an emergency fund in place scares off emergencies?
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SAVE for the UNKNOWN emergency
April 22nd, 2008 at 02:52 pm
April 22nd, 2008 at 03:14 pm 1208877266
You are right. The emergencies you mentioned are things that we can expect to happen.
April 22nd, 2008 at 03:40 pm 1208878837
I think something is an emergency only when we lack the savings and preparations for them.
So, as one progresses in their financial fitness, the need for a basic emergency fund diminishes along with it.