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My Emergency Fund Is Never Ready For an Emergency

April 9, 2019
My Emergency Fund is Never Ready for an Emergency _ Tiny Ambitions

Ask any personal finance writer and they’ll tell you that a fully funded emergency fund is essential. They might vary in the amount of expenses they think you should have covered (the average is somewhere between 3-6 months worth), but they agree that it should be a priority after paying off debt and before embarking on other saving priorities. I’ve been reading personal finance blogs and books for years and it wasn’t until before this past Christmas that I actually opened my own and started (very meagerly) to fund it.

Unfortunately for me and the emergencies that have cropped up since the beginning of the year, the Emergency Fund has never had more than $300 in it at a time. And, as of this writing, it’s sitting below $100.00.

There have been at least three unexpected expenses in the last three months that would have benefitted from a fully stocked emergency fund.

Emergencies Come In Three’s, Apparently

The first, $1200 in surprise new brakes and callipers for my car was emergency number #1. Cars are just pesky money-pits just waiting to prey on your bank account. If I didn’t live in a city where I can’t really rely on transit, I wouldn’t own a car, period.

The second emergency was having to pay an old landlord $1100 (each) to settle an issue (and that’s all I can say about that). This one was probably the most nerve-wracking emergency of the lot.

The most recent emergency is smaller in dollar amount but more stressful to my heart. We had to pay around $500 to take care of our fur baby’s bladder infection and bladder stones. As far as pets go, our cat has been incredibly low maintenance over the last either years. But, I still wish we didn’t have to spend a terrifying two weeks wondering if she was going to make it. (Update: the fuzz is on the mend and still as adorable as ever, as my Instagram can attest to).

All of these emergencies, plus the normal bills that come with being a new homeowner (mortgage, taxes, utility bills, maintenance) has meant I’ve been feeling very strapped lately. I could have absorbed any one of these emergencies on their own, but all three have been a lot for my bank account to swallow.

Stopping the Financial Floodgates

To help close the invasive chasm between the funds coming into my bank account and those leaving, I’ve reduced my investment contributions from $500 a month to $100. But even this hasn’t been enough. Even with these expenses looming over us, our lifestyle hasn’t really changed much. And I think that’s why I’m still feeling the squeeze.

If I’m being honest, I’ve purchased one too many things for myself over the last three months as part of a mini-rebound after the end of my shopping ban. I’m attempting to counteract this by listing some of my gently used clothes and accessories on Depop & eBay.

All of these expenses has meant that I’ve been carrying $1500 and $2000 on my credit card for a couple of months. And I hate it. As far as debt goes, I was debt free for almost five years before we bought our house back in the summer and this is also my first foray into consumer debt (despite being a former shopaholic).

This post isn’t meant to be woe is me. I’m using this post as an act of transparency to help me get my act together.

Step One: My Last Resort

Step one in getting my act together will be transferring $1000 out of my investments and onto my credit card. Yes, that money is making me money. But, a 4% return from my portfolio vs. 19.6% credit card interest for carrying a balance is a no brainer. I’m grateful I have the funds at my disposal to clear 50% of my credit card debt. I know that’s not an option for everyone. However, it is something I’m doing as a last resort because I’ve realized I won’t be able to get out of this hole quickly without an infusion of cash.

Step Two: Cash Only, My Dear

Step two – going on a debit/cash/gift card only diet. My credit card is basically on fire from all the swooping I’ve been doing lately. I’m going to do the updated version of freezing my credit card in ice – keeping it out of my wallet for the time being and only using it for essentials when my debit account hits zero.

Step Three: Get that Fund Together Already

Step three – slowly rebuilding my emergency fund to a place that is less pitiful. All in time.

Emergency expenses might have gotten me into this hole. But, I’ve haven’t been doing myself any favours in trying to get out of it. That’s what I need to change.

Wish me luck.

What are your go-to strategies when you’re feeling a little squeezed in your bank account?

Image Credit: Alice Pasqual on Unsplash

  • The Luxe Strategist April 14, 2019 at 8:04 pm

    We had to pay over $1k on our cat, too, so I totally feel you on unexpected costs. We save money every month, but don’t have one specifically labeled ‘Emergency Fund,’ but to me, that’s just a minor detail. But I sure am glad that living in a less expensive apartment lets us “mess up” our spending in other areas, because it was like a tsunami over the past few months (you’ll hear about it soon).

    The travel spending has been high over the past few years, and I was always very judicious about how to spend our credit card points. But I kind of am throwing those standards out the window now and using points wherever I can to get our spending down.

    I wouldn’t say we are average in terms of spending (hello, NYC) or income, so definitely we aren’t good examples for what to do 🙂

    • Britt April 14, 2019 at 8:07 pm

      I hope your fuzz is ok now! And I agree, the label for the account is just a detail. I look forward to reading about your spending tsunami! I feel like these sorts of things can compound really quickly and get out of control.

  • Kerry April 13, 2019 at 6:59 pm

    I can completely relate. I feel like it can be easy to despair at having blown your emergency fund (I have been there). However, having been in situations as a student being in an emergency without an emergency fund, I actually feel gratitude now. Sure I may have just blown my fund, but wow how great is it I had the money to cover it this time. Sometimes you just have to flop your perspective.

    • Britt April 14, 2019 at 9:27 am

      I love your perspective, Kerry! You’re absolutely right. It’s a privilege to have an emergency fund to withdraw from in the first place. Thanks for reading!

  • ncfarmchick April 10, 2019 at 10:03 am

    I think you mean “woe is me.” And I get the feeling. Thanks for an honest post. Hope all is looking up soon.

  • Abigail April 9, 2019 at 11:05 pm

    Sorry to hear things have been so tight (and about your fur baby — glad she’s okay!). When things start to feel a little tight, I take a hard look at my spending and see if any place has gotten out of control. Then I try to focus on whatever areas of concern crop up, and otherwise try to focus on putting money into savings.

    It’s not my emergency fund, but my savings account is feeling the pinch here in a little bit as I take some money out to fully fund my 2018 Roth (yes, I know, I waited til the last minute) and a home repair job. That’s a total of $3,500 between the two. I guess I should just be glad that I have a savings account hefty enough to manage both and stop grumbling. But maybe just a little more grumbling? (Grumble grumble. There. I’m done now.)

    • Britt April 10, 2019 at 7:19 am

      Thanks, Abigail! I like your strategy. The best way to get back on track is often to be honest with yourself and see what your numbers say. And a little grumble never hurt anyone! 🙂

  • Jen April 9, 2019 at 5:03 pm

    I’m glad your cat is doing well and that you got through it all. I don’t want to sound harsh, but I kind of want to point out that things like car repairs and vet bills are not really emergencies – they are expenses that we know are coming, we just aren’t sure when. Have you heard of the idea of sinking funds, where you save a little bit of each paycheck toward a specific thing like vet bills or car repairs or annual insurance premiums? This might help you a lot as you find your footing again, and could also help with the spending issues. 🙂 I have not touched my emergency fund since having designated sinking funds for things like that.

    • Britt April 9, 2019 at 5:54 pm

      I think that’s really a matter of opinion (and definition). When I came home and my cat was having a medical emergency, it was just that, an emergency. The car repair was also unexpected (and an emergency given we would have been stranded two days away from where we live if it wasn’t able to be fixed).

      I’ve never heard of sinking funds in all of the blogs I’ve read, they kind of just seem like emergency funds but you’re choosing to call them something different (which is fine). Thanks for sharing!

      • Jen April 9, 2019 at 6:36 pm

        Yeah, the idea of a sinking fund is to prepare for those types of things. I’m not saying it didn’t feel like an emergency, I’m saying it was predictable which means it would have been possible to be prepared for it. If you own a car, you know it will someday need repairs. If you have a pet, you know they will someday have medical issues. So it just helps you be well prepared for non-routine expenses and the cash will be sitting there waiting to be spent on that exact type of thing. A great place to learn about this is YNAB (a budgeting app, but there’s also a great book about it). Good luck!

        • Chelsey April 9, 2019 at 6:49 pm

          What do you possibly consider an emergency then?

          • Jen April 9, 2019 at 7:04 pm

            I think the example of paying the landlord for the undisclosed incident may well be an unforeseen emergency. Losing a job definitely qualifies. Basically anything you cannot reasonably anticipate. I used to use my emergency fund for all sorts of things I should have been saving for. Pretending an expense is not on the horizon does not mean it is an emergency, it means that you could do better at planning.

        • Melissa Dalgleish April 9, 2019 at 8:09 pm

          Oh man, that all sounds super stressful! I’m so glad that everything turned out okay and you’re back on an upward swing. The anxiety of feeling like you’re walking a financial tightrope is awful.

          I’d second taking a gander at the You Need a Budget (YNAB) approach to sinking funds. You don’t have an emergency fund, per se–like Jen said, you identify places where you know you’re eventually going to have expenses, even if you don’t have them yet or don’t know quite what they’ll be, and sock away money to pay for them when they come. So I set aside money every month for car repairs, and for a new car when this one dies, and for a new computer when this one dies, and for house repairs, and for inevitable vet expenses (especially with a cat who likes to eat questionable things!). I also have a few months of living expenses available in case I lose my job.

          If something COMPLETELY unexpected came up I’d just cannibalize one of those until I could build it back up AND, crucially, have a good think about whether the completely unexpected thing was really unexpected or could be expected to happen again one day, in some form. If that was the case, I’d then create a savings pot for that. Any pots that sit there indefinitely or clearly have too much money in them get repurposed–if my car repairs pot ends up having more in it than the value of the car (my car is old), I’ll move most of those funds into the car replacement pot.

          The YNAB true expenses approach essentially says that 99% of expenses can be anticipated, and you need to create sinking funds to deal with them when they come. I’ve never felt more like I had a handle on my finances or less concerned about my financial future than I have been since I adopted their approach. It’s totally worth a look!

          • Britt April 9, 2019 at 8:23 pm

            Thanks for sharing your perspective, Melissa! Your description is a lot easier to understand (especially what happens when money sits for too long). And you’re right, the anxiety that comes with these kinds of expenses is downright awful.

  • Tread Lightly, Retire Early April 9, 2019 at 11:30 am

    Glad to hear your kitty is okay! After writing part of my post for this coming Monday I am feeling this hard from a year and a half ago. It’s amazing how quickly things can turn sideways. Good for you for tamping it down and taking care of it before things balloon.

    • Britt April 9, 2019 at 12:18 pm

      Thanks, Angela! This whole situation has reminded me of how quickly things can snowball from something small into some much more serious. I’m beyond grateful that I have the ability to take care of it in a couple of big fell swoops.

  • Hannah April 9, 2019 at 8:41 am

    This is so RELATABLE. Often I feel like personal finance bloggers are so far ‘ahead’ of me in terms of finances – debating the merits of tiny differences in expense ratios, or discussing spending 15k+ to buy a car in cash. (smart? Yes! Where I am at? No.)

    Best of luck reining it back in – I’m in the same boat!

    • Britt April 9, 2019 at 12:20 pm

      Thanks, Hannah! I really appreciate that. We’re all at different places in our financial journeys and I am definitely nowhere near my personal finance peers, which can be more than a little demoralizing. Good luck with reining your spending in – we can do this!

    Hey! I'm Britt. I write about living a tiny, simple, intentional life. Because life doesn't need to be lived big.