DSG firedrill--how much money?
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| Fri, 02-04-2005 - 11:11am |
Am I allowed to do this littlesbigs? LOL
Okay, here goes:
There has been an error in your checking account and they completely failed to credit your account with your latest paycheck. It will take at least a week for them to fix it. You have a mortgage payment (or rent), utilities, and groceries to pay for.
Without charging, using credit lines, borrowing from friends or family or otherwise creating debt, how much money can you get your hands on right this minute?
With about a week's notice, how much more can you get your hands on (no debting, not even temporarily on 0% cards!)?
Again, you must do this without resorting to borrowing. For the purposes of this drill, I am considering borrowing against a retirement account or cashing it out with a penalty to be off-limits.
Now, what if you were allowed to touch your credit line/cc/equity/retirement account? How much would you need and how much would it cost you to borrow it for the week until they fix your paycheck deposit?
Okay... go!

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Ack! I'd be freaking out.
Instantly, I could get my hands on $647.66. I'm actually surprised at the size of this number! I just added up the numbers of things I have money set aside for "below the line" in my checking account, plus the savings attached to the account that can be accessed instantly through an ATM or balance transfer. Wow. :)
In a matter of days, I could add an additional $2786.49 from my ING accounts, for a total of $3434.15. Wow. I could pay my entire month's basic expenses out of money at hand. I am so happy and excited. I actually had not worked this out before posting the question, so it's been fun putting the numbers together.
I remember in my debting days how it seemed like I was only charging such little amounts, just $20 here or there, and how it seemed like it just racked up and up into obscenely large numbers on my ccs. It's so fun to watch that math work the other way--it seems like I'm just putting away a little money at a time, and it's spread out over different accounts, so it doesn't seem so great, but added up, it's quite significant. And I've only been working on these accounts for a couple of years, while paying down debt at the same time, and using the accounts from time to time to cover expenses such as birthday parties and new appliances, repairs, and taxes--so it's nice to see that they keep growing and moving me closer to true financial freedom.
This is so nice. :)
Heather
My answer would be better if you asked me in a couple months :)
If this happened now, I could use the $250 sitting in my checking account (my cushion). That would cover groceries and get me through the week, I would have to put off rent and utilities or other bills until they fixed the error (and then pay whatever late fee - which I hope my company would reimburse me for).
If I could take a cash advance from a credit card I would have access to $30,000 (the amount of available credit on my 4 credit cards). I would need about $1,400 to cover rent, utilities, groceries, gas and the $20 I take out in cash every week for miscellaneous purchases.
Edited 2/4/2005 11:38 am ET ET by firstamendment
Okay, sitting as the base of several different accounts, we have $200. (JUst started this year - every time we put a payment into an account, I have been rounding it up to the next 10 or 100).
In our main joint account, we have about $1800 right now (not sure of exact amount, because just wrote cheques, and Fi bought something).
This actually happened to us in December! We took out a cash advance on my credit card. It ended up costing us $0.34 to pull out $400 for 2 weeks.
We really need to build up our emergency fund.
This is a good question...had to think for a minute..
If I had rent and utilities due in the same week...which I usually don't, I'd need about $900.00...including a bit for food and gas. If I needed to I could get my hands on $3045.22 from my checking account (just checked my balance). I also have a paycheck from my weekend job that I didn't cash yet for $304.... oh and I forgot there's 360$ in my glove compartment in cash....so that's $3609.22...forgot about that...
I just paid 2K to my car insurance, so a missing paycheck would make me a little uncomfortable, but I'd survive....
In a week's notice I could get another 200$ from savings (pitiful, I know) and I've got a paycheck coming from my weekend job next week...guessing it's around 400$....
I never thought about borrowing from my retirement...and I wouldn't need to use a CC... which is good bc they aren't that far from being maxed out....I don't have enough room to use them for a cash advance like that....and wouldn't want to because the intrest is so high...like 25%...ugh....
I have a nice little emergency fund going so far.....six months ago my answer to this question would be very different...
This would be completely impossible without borrowing. I would borrow it from my parents and pay them back as soon as it was corrected, which is the only thing that makes sense. My parents belong to the same credit union I do and have a very large cash reserve. Doing anything else to cover a week-long problem would be foolish.
However, after I get my $1000 emergency fund established this year, the next step is to set aside *one* month's worth of expenses. Since that is about $5000, that is no mean feat.
Kelly
If this were to happen to me right this moment, I'd actually be ok. My federal tax return should be here in a few days. LOL!!
But at any other time, I think I'd have to resort to selling some stock. LOL! :-D
Bad answer, I know...but we haven't built up an emergency fund just yet. :-D
Pat
Maybe I should have explained that I only get paid once a month, via automatic deposit (which in 10 years has never once *not* been deposited on time), and I have almost all our bills deducted automatically from our checking account within 1-7 days of the deposit. So not having that money would be a disaster if I didn't have a resource to *immediately* deposit the money into our account. One reason I haven't been in a hurry to build a backup fund of 3-6 months is that it makes much more sense to pay off my bills first and know that I could borrow money short-term from my parents in a matter of minutes if necessary.
Kelly
I'd be nearly okay if that happened. I changed the way I deal with paychecks, and it really works well. Instead of designating one paycheck for, say, mortgage and the other each month for bills, I added up the total amount that I owe each month and divided by two, so each paycheck contributes a hunk to that total, and then I use what's left over for groceries, my wee savings, etc. I've got it so that by the 1st of a month, I have all the money I need to pay for the upcoming month's bills, no matter when they are due. So, if I ever "lost" a paycheck, I have half of what I'd need already in there. I could move my meager savings over and just about cover it if I needed to.
Example:
It's the beginning of the month, all of my bills are paid or are due soon, but I have enough in my account to cover them all for the month.
Then my account gets very low, sometimes down to $20 or $30, but it's okay because I have cash for groceries already set aside and all my bills are paid. This low account balance used to stress me out, but now it's my favorite time of month because all my bills are paid AND I have $20 left over!
Mid month paycheck brings account balance up to half the needed total for the next month.
Late month paycheck brings total up to full for upcoming bills.
I pay for all groceries, extras, household stuff, etc with cash via the envelope method, with money withdrawn each payday.
Works for me! I'm either up to date on the bills, halfway ready for next month, or entirely ready for next month.
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