Staying Safe With an Emergency Fund

How often have you felt you've finally gotten on top of things financially, only to be faced with some dumb repair on the house or the sudden need for dental care? How can you be expected to achieve -- and maintain -- solvency when there's always something coming along to bring you back down to the bottom of your checking account?

There's only one way, Dear Reader, and I'm sure you know what it is. We need to have a special fund put aside for the unexpected because, in fact, the unexpected isn't unexpected.

Or, to put it another way, everything and everyone has to be repaired, or doctored, at some point. Those of us who don't acknowledge that and put money (and insurance) aside are just setting ourselves up for financial disaster.

And still you protest. "How could I possibly have expected the furnace to "puff back," cover everything in my house with soot, and leave us with a cleaning bill that was more expensive than Christmas?"

Part of us wants to feel victimized; that way we don't have to feel responsible when we can't come up with the cash for life's quite ordinary expenses. Part of us simply doesn't want to grow up.

"Be prepared" is, or used to be, the Boy Scout motto. I grew up in the 60s, when we believed that anyone who was trying to be a good Boy Scout was a nerd. "Be prepared" sounded like our parents. We wanted to be "loose." We wanted to know that we could survive by our wits. I did a lot of surviving by my wits when I was a single mother with three young children and I'll tell you the truth -- I wouldn't want to go there again.

But I'm still having trouble with "Be prepared." Just as an exercise I'm going to make a list right now of what I think I should have to be fully protected. I should have:

  • A repair fund for the car.
  • A dental fund for my teeth (these have always been a big expenses in my life and I still get caught short when a root canal is in order.)
  • A clothing fund that includes enough money for my professional outfits (as compared to the sweats I write in).

Let's face it. I should also have a Christmas fund and a gift fund, so I'm not always moaning about the gift when someone gets married, or has a birthday. I should have an investment fund for my future. Finally, I should have--and here's a biggie -- some sort of disability insurance in case I get laid up and can't work.

Okay. I've made the list. Now I feel really rotten. How could I possibly be the age I am and still be living on the edge? I'd rather go back to thinking my only expenses are rent, utilities, gas, groceries and insurance. I'm a single person. How high could my expenses be? For me, I think part of the resistance is I don't want to believe I'll be single and paying everything myself for the rest of my life, so I put myself on hold.

But there's no peace in ignoring the supposedly unexpected. I suddenly got a glimpse of what my life would be like if I had all the funds I listed above. My life would be like my parents'!

And guess what? At this stage of the game, I'm thinking that doesn't look so bad. Bills paid on time. No debt. Savings. Investments. Knowing where the next nickel is coming from. Lord, it sounds like heaven itself.

Time to re-do my spending plan and add those new categories. Even if they're small to start, they'll build. Just like solvency!

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