Smart, savvy, financial blog readers like yourself are certainly conscious of the importance of an emergency fund. But, maybe it’s been awhile since you’ve dipped into yours. Maybe you’ve become a little desensitized from the effects of not having one. Today we at Enemy Of Debt are doing a public service announcement giving everyone a bit of a refresher as to the importance of the emergency fund.
I saw my wife’s phone light up with a text message notification. The message was from our son, notifying us that the garage door would not go all the way up, and was making a dreadful noise. When I returned home I found the chain drooping sadly and some pieces laying on the floor. The garage door opener which had served us faithfully for fourteen years was broken and would need to be replaced.
A new garage door opener was an unplanned $150 expense.
The phrase “unplanned expense” is a bit of a misnomer. While the specific entities that required funs may be unexpected, one should always assume these sort of things will consistently occur.
Unplanned Expenses Need An Emergency Fund
For example, other unexpected expenditures that have occurred recently, or that may require funds in the near future are:
- Taxes : After several years of paying in during tax time, and several adjustments, I thought for sure this would be the year I wouldn’t owe anything to the government. While I was correct about my federal return, I did owe the State of Minnesota several hundred dollars.
- Brakes: We’ve had our minivan for over four years now, and I’ve never had a vehicle accumulate this many miles without needing the brakes redone.
- Birthday Party : All my daughter wanted for her birthday was to find a large space to play loud music and dance with her friends. We found a building on our county fair grounds that was reasonable to rent. They had a great time, but without money tucked away we wouldn’t have been able to make it happen.
- Moving Son : Our son will be moving home from college in just a few weeks for the summer. The furniture he purchased during the year will not fit in our van, so we’ll have to rent a Uhaul.
Events that require extra funds always come up. Always. While you may not be able to specifically identify them, we should expect them and plan for them by building up an emergency fund. When these events to inevitably show themselves, the normal budget can continue without skipping a beat.
How about you, EOD Nation, what unplanned expenses have you had lately? Did you have an emergency fund to handle it?
I leave extra padding in our monthly budget for unexpected or irregular bills, we have “buffer” accounts for medical bills and auto repairs if the padding in the monthly budget isn’t enough, and we have a CD ladder of six months worth of expenses in case my husband loses his job, so I guess we have A, B and C plans going for us.