What do you consider an Emergency?
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What do you consider an Emergency?
| Tue, 07-26-2005 - 9:33am |
Hello all, borrowed this from another board.
What do you consider an emergency that allows you to dip into your emergency fund?
So far I honestly am having difficulty thinking of anything. If my car breaks I will just drive another one that we own. My hubby (mechanic) is mr fix it, so we never pay someone to do anything in our house. He exchanges services with a HVAC & plumber when he needs a little guidance. The appliances in our house are fairly new with the exception of the refridgerator, but we could use the one in the basement if push came to shove. We have health/dental insurance which I alredy budget for copays & prescriptions.
What am I missing?


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While having a positive attitude is good...and normally im NOT a person to rain on the optimistics parade, and like to consider myself optimistic..... AND, I think just the fact that you're Thinking about planning for emergencies is good, so, I hate to be raincloud first thing in the morning...but...
Despite health insurance, my kidney stone outbreak while traveling was $4000 out of POCKET (as in, AFTER insurance & copay), at the hospital in Denver, the copay at my Dr in KC, the $50 KIT from the pharmacist for my pre-test prep...ANNND...time off of work for the tests at the hospital, which thankfully Were covered, except for the lab work, which was only a few hundred.
Despite health insurance, when I finally got Soo overwhelmed and found that MAJORLY reducing my stress was NOT making me feel better....the out-of-pocket for sleep tests (Dr ordered), were just under $2,000 EACH (there were 2 of them)...though luckily no missed work.
Despite health insurance, Dr ordered emergency surgery for wisdom teeth (NOT done in a dentists office, but at the hospital), was NOT covered AT ALL. I think that was $1800 or $2000, I dunno, I wrote the check while still doped up. heh. and a day of missed work.
that's where *my* emergency fund went, more or less. and the "stress reduction" I needed included taking a lower income job.....and then my rent doubled when my roomie moved out...and the CC debt came when i was writing rent checks with the checks my CC company sent me, because my income was about $500 short every month (and the cost of breaking my lease was equal to the total rent I'd pay staying until the end of the lease.)
Other "emergencies" for me, that luckily have never occured but I DO plan for..include the fact that all of my family is 1,000 - 2,000 miles away, and, should something happen to my parents, I want the funds available to be able to buy an immediate plane ticket, and get to where they are ASAP. I dont want to be sitting here thinking "I hope Dad hangs on long enough for me to save up $300 for a plane ticket and for me to work some overtime this week so the missed work next week isnt a hardship." -- morbid, yes, but definitely an emergency.
What if you or your DH suddenly lost your job? What if it was due to disability and you werent able to immediately go find SOME work, and your income dropped to zero? Your emergency fund is for mortage payments and food on the table. You're in Maryland, so, you have equal possibilities (though granted, not HUGE possibilities) of hurricanes, floods, & blizzards.... all can leave you in need of MAJOR repairs to make the home livable...and possibly send you into evacuation for the short term...meaning hotel expenses, etc...Also...I was in Florida a year ago, in Vero Beach, where the eye of Charley went thru... you cant imagine the budget-busting cost of just buying Basic budgeted-for items in the week before and months after those storms hit.
As for having a spare car....Congratulations! and depending on your auto insurance coverage, it might be arguable (though not common) that you would have no foreseeable medical expenses for you or a person in another vehicle, in the case of an accident, and would be reimbursed for any decrease in income.... However..here's a story thats weighing heavily on my mind right now, that sort of relates to a damaged car:
a friend with a teenage daughter had a small get together this spring. 10 or 12 17 or 18 year olds hanging out in their rec room. Not a "party", no drinking, parental supervision was on hand. the dozen "good kids" decided to go into town for ice cream, and they loaded up into 2 vehicles and headed down the road. Somehow, one of the vehicles overturned...a Very bad wreck, teens were all thrown from the vehicle that they estimate rolled 4 or 5 times, and, well, lets just say body parts were lost....and now, my friend is being sued by the parents of one of injured children, for not Personally making sure that the 17 and 18 year olds all had their seatbelts on when they left the house. -- so, now there are lawyers fees and court costs...on top of therapy for the Entire family for dealing with the emotions, as they were the first on the scene (before EMTs even), to a tragic accident that they can best describe as "everything you imagine war to be"
~ Definitely not something you PLAN for. WHich is, I think, what an emergency is...something that is NOT foreseeable,
You're not thinking "well, I need to budget in this money because I don't plan on looking when I back out of a parking space at the grocery store tomorrow, and I think I'll run over the big toe of that kid out in the parking lot gathering carts"
But, its still nice to have some money set aside if that happens. ;)
~ Teresa
Teresa
http://www.affordingpickles.blogspot.com
Hi there!
I also budget for health expenses (copays, etc), and I try my best to budget for our family's neccessary expenses. I have one emergency fund for household emergencies, and another for pet emergencies.
First, the pet fund. I budget for my dog's normal expenses like having his nails trimmed and having his yearly shots and simple office visits for when he might get the sniffles or run a fever or have a flare-up of his allergies. Those are expected expenses. The pet fund, then, is for those sudden emergencies when I have to grab him and rush to the Animal Hospital because he's just had a massive bout of bloody diarrhea and vomiting and he's laying limp on the floor (he has a very sensitive tummy and allergies so we never know what is going to set him off and how it will present itself). Just an hour in an exam room at our Animal Hospital, with a few blood tests will set us back over $300 easily. I suppose it would be more if he were a larger dog, but he's only a toy breed, so costs are usually less for him. If sugery is needed, such as when they suspected his intestines had twisted and formed a knot, that would run into the thousands, easily. There is medical insurance for dogs, but we have heard they are difficult to work with, so we choose to save for his expenses on our own. So we dip into this Pet Emergency Fund for those expenses that are sudden and very expensive.
Our own Emergency fund for household use is for appliances that break down, car repairs that need to be done, sudden travel expenses for when our parents (who live out of state) are rushed to the hospital with life-threatening emergencies, and we have to rush to be by their side. We dipped into our emergency fund two years ago when we found out we'd have to move suddenly, due to Dh's work, and we had to quickly replace our carpeting and repaint our whole house. Just those sudden things that you don't plan for, but just seem to happen. Everyone runs into an emergency sooner or later, just something sudden that you didn't plan for, but just sort of happens. :-D
Hope this helps! :-D
So far we haven't met with an emergency in three years that's caused us to dip into our emergency fund. But that's largely because we have an assortment of other funds designed for specific purposes--we have an auto fund for car-related expenses, home maintenance fund, clothing fund, etc.--even an opportunity fund for when we find a great deal on something that we've been wanting.
An emergency for us would mean loss of job or major medical emergency for which our insurance and medical spending plan combined would not be enough to cover (major chronic conditions might qualify also). Basically, to my way of thinking, the emergency fund is there for the major life disturbances that we all hope won't happen, but might. It's an insurance policy of sorts.
I followed a plan similar to yours (in the related thread below) for our early financial goals. I set aside $20 a month in an emergency fund and the rest of our "extra" went basically to debt (we also had our variety of funds described above in place that were regularly funded out of our budget). At some point dh received a bonus that funded the rest of our emergency fund up to the $1000 DR recommends, and that's where we've left it (accruing interest--so now it's $1013 or thereabouts, lol) until our debt is paid off. It's not enough to cover a job loss of any significant duration, but it would cover us for a few weeks, combined with the other various funds we could tap.
Once our debt is paid, we'll build a 6 month cushion, then fully fund our Roths (we have a fully funded 401k plan in place, to take advantage of company match--hard to pass up that instant 50% return on investment), then begin building some serious cash for our goal of buying a big piece of property to homestead on.
So, that's my answer to both your questions (sorry to combine them like this, but I just got talking and couldn't stop, lol).
Blessings,
Heather
OK thanks for your thoughts.
The chances of my hubby losing his job are slim to none but he could be working before he received his last paycheck. He has a high demand job. My entire family lives within walking distance of my house, so no plane tickets to purchase. We have accident & disability insurance on my husband, life insurance if god forbid its needed on everyone in the house. I already budget for medical emergencys, co pays & prescriptions in an account attached to our checking. (our deductable is $1500) We have homeowners insurance for hurricanes, floods, and whatever.
Our daughter is 18 months old and not yet allowed to drive our cars.
I also have this believe that everyone is only in one life altering accident and we were in ours already, but thats why we have good auto insurance.
But thanks for making me think about those things.
Shannon
Shannon
"we have a fully funded 401k plan in place, to take advantage of company match--hard to pass up that instant 50% return on investment"
Heather,
I think it would make more sense to only contribute up to the company match on the 401K instead of putting the maximum contribution. I would put the difference into your Roth.
just my thoughts,
Shannon
Shannon
I have come to realize with money/debt/payments every month gets better then the last. Make a list of your goals, and keep plugging away at them.
Could you get a part time job? Can you tighten the budget? Meal planning and cutting back on groceries can be enlightening. We shop at Aldi for groceries, do you have one in your area? Our financial reality check was when I added up how much we eat out. We still spend $100, but thats a far cry from the $900-$1100 we used to spend eating out.
Another thing is I never pay full price for anything, and rarely buy clothes not on clearance. Even some "sale" prices are too expensive for me. I stock up on everything the year before.
Hope this helps,
Shannon
Shannon
Although your Dh is in a high-demand job, please be sure you could get by if he were out of work for months at a time. I say this because my parents had no credit card debt (I dont believe they have ever had a single card, believe it or not :-D), had family living very close to them, had insurance, and my Dad was also in a high-demand job. One day, when my Dad was 50 years old, he collapsed on the job from a heart attack. He was out of work for four months. Disability insurance covered a bit...but my Mom had to go out and try to make ends meet by getting a paying job after 30 years of working hard as a homemaker. Then, two years later, my Dad's heart gave out on him again, and this time, he was told he'd need a triple, possibly quadruple bypass, and the doctors weren't sure he'd make it. It turned out to be a double bypass once they performed the surgery and could accually see the damage done, but although he had insurance and disability insurance, and such.....they still needed a little extra help to get them through the next 4 months that he was unable to work. Then he had to take a cut in pay in order to take a less physical position in his same line of work because he was now unable to lift more than 15 pounds and was much more weak and easily tired.
Anything can happen in life. I hope and pray you and Dh will never have to dip into any sort of emergency fund, but there's peace of mind in having one, no matter what your current circumstances are.
8 years ago, I never dreamed that I'd have to pay my oldest son's funeral expenses. I was happily planning his birth and blessed arrival. Then he arrived premature and could not be saved, and we had to plan and pay for a funeral and burial at the cost of $3500. It's just one of those things you don't plan for....but who would have thought to buy life insurance on a child who hasn't been born? Not sure it's even possible to do so. But that's just how life goes sometimes.
I'm sure you and Dh will make the best choices possible in planning for any future emergencies. Good Luck!
Taylorblue :-D
I just got a letter in the mail from our state's Central Tax center~~ apparently I never paid a portion of 2001's state tax!! I looked in my files---- and there was the form my tax preparer gave me with the amount due~ oooppss!!! What was $197 in 2001 is now $290 due to late fees. I had to dip into our new house savings since we do not have emergency savings yet. Human error can be a good enough reason for savings!!
Are you sure your homeowner's includes flooding? In my area last year we got hit with a microburst and flooding and people just assumed it would all be covered. Wrong. Flood insurance is a separate policy which hardly anyone had. Plus, people (like my aunt) had good insurance and they still wouldn't cover everything from the storm damage.
Some other things that popped up for us were #1. a new roof,(Dh did most-but supplies are expensive,) #2. gas company came thru and dug up lines and determined ours needed replaced ($800)- each homeowner is responsible for the line that connects your house to the main line at the road! #3. our drains got clogged in the basement- bigtime! My dh is also very handy- but it wouldn't unclog. This was all just this spring/summer by the way.
I'm sure I could think of more things--oh ya I didn't even get into the repairs our camper needed from the winter!
Nicki
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