Using an emergency fund for small emergencies


#1

In the past two months, we have been on a loosing streak with home and auto repairs. In April my wife’s 2010 Subaru Forster needed a new exhaust, cost $900. Last week, I took my car for an oil change and they said I needed tires. Yesterday, I bought 4 tires for my 2011 Subaru Legacy and it cost $420. They did not do an alignment because I now need tie rods. Appointment is made for next Saturday for tie rods for $470. Last night, the kitchen faucet broke. Will get one for $120 today at HD and kindly ask my handy neighbor to install it. Also, our washing machine is on it way out. That will cost $400 (no fancy front loader here).

The nice thing about having an emergency fund is that I can take the money out for these minor emergencies and replenish it over the next few months. An emergency does not have to be a job loss. By having this fund, we don’t have to incur debt to pay for these expenses.

There will always be bills with cars and a house. I do hope that this trend of repairs slows down soon.


#2

Sorry for your luck. Dang.


#3

That’s quite the bad luck streak. Hoping it’ll go back to normal now for you and your family. And yes, I do think emergency funds are for small as well as major emergencies. Like you said, the point is to not run up credit card debt to pay for unexpected bills.


#4

Setup a small savings account (envelope, piggy bank etc). Set aside a percentage each month into for such items. This way you don’t have to touch your emergency.
These are typical maintenance items and things that you know will break down. These aren’t really emergencies.


#5

It looks like you weathered a bad financial storm with flying colors since you didn’t have to do any borrowing. Congrats!

My wife and I keep a 20k buffer in our checking account at all times. This is in addition to our emergency fund. When our furnace went out last year, it was a $4500 expense. When I told the guy I was paying cash (cash back credit card that gets paid off no matter what) and didn’t need to finance it he seemed really surprised. His reaction alone tells me that most people finance big ticket items like and AC or furnace.


#6

I hope your bad luck streak ends soon as well! Wow, that’s a lot of money when you add everything up.

We do have an emergency fund, but we tend to ‘ignore’ it when it comes to small emergencies. We usually get by by budgeting for minor repairs from our monthly income.


#7

I got a small break this morning. The mechanic called and said that he was able to straighten out the tie-rods. I only had to pay $50 for an alignment. That saved us $420.


#8

We have a ‘home’ emergency fund wherein anything that needs to be fixed in our house and our rental gets paid off. It mostly comes from our rental income too, so it doesn’t hurt our own finances as much unless it’s a really expensive thing. (We only keep $3k in a savings account so we can utilize higher returns through other means)

If that emergency money dips down, we fill it up again the next month.

Hopefully we get to use that same ‘house’ fund into a car fund too. We’ve been sinking a bit of money on our car too (a 2008 model)


#9

I feel your pain. Just dropped $1700 on emergency dental work. The woman who handles their payments was so concerned and felt so bad that the bill was so high and thought it would really impact my life. But I told her I have an emergency fund for a reason, swiped my credit card, and went about my day. Albeit with swollen cheeks and some slurred speech.

Just made me think about the reason she was probably so concerned is that there are a lot of people out there that she deals with that can’t make that kind of payment at any given time. I am very grateful. __


#10

Oh that’s terrible. You know what doesn’t break you can make you stronger? You’re already thinking about how quickly you can replenish the emergency fund! That’s an awesome mindset. What we lose monetarily can be made back again :thumbsup:


#11

Ouch, I’m so sorry you had dental problems. They’re the worst! Especially if they come when you don’t have an emergency fund in place! Happened to me a few years ago, had to come up with about $800 and until I did, I stuffed my face with pain killers… That’s something I never want to go through again!


#12

Wow, it sounds like a lot hit you guys all at once.
We tracked our spending and found what we average per year on our house and cars and now budget for these categories. Repairs are still no fun, but they’re no longer emergencies and we have the money already earmarked for them so we don’t have to raid our E-fund.


#13

Unfortunately I’ve gone without the pain killers… but with my family history I try to stay away from the narcotics lol.


#14

I am sorry to hear about your dental problems. It is awful when you are in pain. I hope you don’t have to go through that again.


#15

Also a side note but on the same topic, my wife is not into FI like I am. She is a nurse and loves her job and doesn’t really care about how much money she makes. I pay all our bills and handle all our savings and investments, etc, and she has always just been very frugal out of principle so it works out well. Between the dental work I had, her needing four new tires, I am renovating our condo right now, she keeps having situations where she is concerned we’re spending so much money.

Every time I just sit back and say, “already have money set aside for that, hunny. We’re good!”.

It’s a great feeling to let your money work for you and not the other way around.