If you are, you aren’t alone.
Approximately 63% of Americans have no emergency savings for things such as a $1,000 emergency room visit or a $500 car repair
I picked this article for the week because I have been binge watching Life or Debt on Hulu! Basically, the host goes into help families realize their situation, restructure their households to be more efficient all in four days. Then he revisits 90 days later and evaluates how they did. It isn’t as bad as it sounds; there were some bad episodes but for the most part it has been pretty good.
The statement that Victor Antonio (the host), says every episode is that the family is one paycheck or one bad day away from disaster. I read the article “Most Americans are One Paycheck Away From the Streets” at the start of the year. I think it is a good reminder to everyone right now.
Have you set up some kind of emergency fund? Have you used your emergency fund and been neglecting contributing to it, again? Have you paid off your debt (yay you!!) and not started putting together your 3 to 6 month emergency fund?
Let’s be real. Emergency funds are boring. They suck. You are, literally, putting money away just waiting for the ceiling to fall on you. But, do you really want to charge your deductible to your credit card and pay like 25% interest on it? If your kiddo breaks their arm do you really want to be worried about how you are paying for it? Wouldn’t it be so nice to be able to swipe your card, hand over the cash or write the check to the plumber when your hot water tank blows up, without a worry of what will we have for dinner the rest of the month?
Your emergency fund is your own personal insurance for Murphy. Just like car insurance, you don’t really want to pay it, but man, it sure is better to have it when you get in a car accident.
Can you cover a $500 or $1,000 emergency?
We do have a $1,000 baby emergency fund. We also have some sinking funds for various things (like car stuff) to help cushion the pain a little. We do try to wack a mole through our categories if Murphy visits, instead of immediately dipping into our emergency fund.