You may know that I wrote about emergency funds recently – what it is and how to save up a fund even if you haven’t much money.
Read about Emergency Funds : A must for Healthy Finances here. The basics of Emergency Funds including why you should have emergency funds, how it will help you, how much you need and how to save up for one if you’ve no money are covered in a nutshell.
Do start building up your emergency fund as soon as possible if you do not have one. Don’t be like the 23% of Americans surveyed who had less than $100 to pay for an emergency expense (2017 GOBankingRates survey).
Yes, I know it’s not a sexy topic, but just like eating vegetables to keep healthy, we need to know all we can about emergency funds and how to use them. These are real stories which show how important emergency funds are.
How My Emergency Funds Saved Me
I myself have an emergency fund, and thank goodness for it!
As you know, such a fund is meant for you to be able to afford an unforeseen expense such as auto repairs or the need for medical attention.
Recently my emergency fund had to be called into action!
Compulsory Car Inspections & Fixes
Where I live there are mandatory annual vehicle safety inspections. My first car, a 2007 model, didn’t pass due to both its front tires being old and no longer in a safe condition. So how much had to come out off my emergency fund? $120.
Now, just four days later my second car also needed an inspection. Quite a coincidence, wasn’t it?
My second vehicle didn’t pass the inspection as well!
This time round there were several issues.
Tire issues again! The rear ones were found to be perished and in need of replacement. The cost? $110. A little bit less than the other car as the tires are relatively smaller.
There is more – the parking brake was not holding very well and needed attention.
The cost? From $50 up to perhaps $153, depending on what was causing the problem.
So the total amount of spending could be up to $383 (I haven’t had the repairs done yet).
Yes, it’s painful. But knowing that I have an emergency fund to pay for these costs gave me not just peace of mind, but great relief as well.
Emergency Funds To The Rescue Of Another
Coincidentally I was reading about another writer who had to tap into her emergency fund due to car-related matters.
She and her boyfriend were on their vacation when they rear ended another vehicle. Since they were at fault and they weren’t fully insured, they had to buy a replacement car, since their vehicle was totaled.
How Did Their Emergency Fund Help?
Fortunately, their emergency fund came to the rescue.
Without the emergency money, they would have had to go into debt to finance their new vehicle.
The auto loan would have cost them interest payments. The accident and its consequences would also have been much more stressful. She was also injured in the accident – several hundreds of dollars needed to be spent on medical care and prescription medications.
If Only They Had Emergency Funds!
If you have read my earlier post Pet Insurance, Best Ways to Save, you’d have seen that a friend of mine had to cough up a total of $2,150 on vet fees to treat both her cat and dog.
Her cat had a badly injured limb, while her poor dog had its eye scratched by her cat (not the one with the injured leg).
Another friend of mine had a 9-year-old pooch that needed seven of its teeth removed. That set her back by $640.
Even sadder, she didn’t have an emergency fund to use to pay the vet. She ended up having to take up a loan that needed her to pay interest 🙁
My spouse’s colleague has an aging feline that was badly wounded in a cat brawl. The poor thing needed surgery done, followed by rather extensive and prolonged treatments.
Again, she didn’t have any pet insurance or emergency fund to help her foot the costly vet fees. This was a blow to her finances.
It is clear from what has been said above that it is really a must to have an emergency fund.
Having this money in reserve really helps to give you the peace of mind – you know that you can cover the cost or par of it should a costly incident unexpectedly happens.
If you do have a fund, keep adding to it. You will be really glad you did.
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Have you met with unexpected expenses? What happened? How did you pay for the repairs, replacements or fees?