Emergency Funds are not Fun...but they're important!
It seems like every time I get close to reaching my goal of 5k, something happens and I get thrown back a bit. This time around my emergency fund got frozen* inside my Home equity line of credit, basically leaving me with zero now. Since it was used to pay part of the 2nd mortgage (the heloc), it's not like i really "lost" the money, but I still can't tap it in case of an emergency. In reality, an emergency wiped out my emergency fund!
There IS a lesson to be learned here: Emergency Funds should be totally liquid, and accessible 24/7!
Lucky for me i'm a pretty positive guy, so as frustrating as it is, at least i am learning something :) There's also something to be said from starting with a clean slate. Before this happened, I had accumulated $4,800, but slowly kept chipping away at it until it reached around $3,000. Then I had my "aha!" moment and started adding back to it. At this point, however, I kept thinking i was down 2k and couldn't feel content until i was back at 5k. Thus, every time i added $ into it I couldn't feel at all happy about it as I was just making up for it.
This time around, however, I will leave it alone 100% and watch it grow. So each time I add a little into it, I'll be proud every time knowing that i'm that much closer to reaching my goal. Now I'll be saving up, instead of catching up.
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*To read more on our heloc freezing up, read my operation heloc: the bad :( posting.
*To read more on why helocs freeze up to begin with, as well as some awesome commentary from users and how it affected them, read this article from The North County Times.
There IS a lesson to be learned here: Emergency Funds should be totally liquid, and accessible 24/7!
Lucky for me i'm a pretty positive guy, so as frustrating as it is, at least i am learning something :) There's also something to be said from starting with a clean slate. Before this happened, I had accumulated $4,800, but slowly kept chipping away at it until it reached around $3,000. Then I had my "aha!" moment and started adding back to it. At this point, however, I kept thinking i was down 2k and couldn't feel content until i was back at 5k. Thus, every time i added $ into it I couldn't feel at all happy about it as I was just making up for it.
This time around, however, I will leave it alone 100% and watch it grow. So each time I add a little into it, I'll be proud every time knowing that i'm that much closer to reaching my goal. Now I'll be saving up, instead of catching up.
- This year's goal: To reach $5,250 (yahoo!) I'm fairly confident i can make this happen.
- My ultimate goal: To reach $10,500, which is what i'd need to survive for 3 months. (scary huh? I am working on lowering this, believe me.)
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*To read more on our heloc freezing up, read my operation heloc: the bad :( posting.
*To read more on why helocs freeze up to begin with, as well as some awesome commentary from users and how it affected them, read this article from The North County Times.
Labels: advice, emergency funds, goals, helocs
posted by J. Money at
9:15 AM
6 Comments:
Hi -
This is the first time I posted on your blog. Last September I had horrible pain and ended up in the ER. A CT scan was done - the reading was swollen lymph nodes in my abdomen. The pain caused by these swollen lymph nodes is much like appendicities. I have a long complicated medical history. Bottom line, my oncologiest has assured me this isn't cancer.
I am on a leave of absence from work. My office didn't offer short term disability, so my emergency fund is my saving grace. My take home was about $4K every month. Thank god I had approximately $28,000 in liquid funds that I am now living on.
I'm taking it a day at a time. I have no answers. The morphine has impacted my thinking and cognitive abilities making it difficult for me to perform my job = I've lost all math skills.
I'm thinking of starting a blog to share my journey with others.
Very good point about Emergency Fund. After Marti and I worked out of our $15,000 CC hole, the first thing we did was get our Emergency Fund. Now it is where I want it to be, 3 months of salary. And it is a nice load off my mind. So keep at it. It will be worth it once you get it done!
Annie - I'm horribly saddened by that :( I really REALLY hope things get better, and fast for you! You're right, THANK GOODNESS for your money stash (and the morphines!)...hang in there!
I think starting your own blog would really help you get through it all too - you can meet wonderful people and get additional support, not to mention passing a lot of time while you get better! PLEASE keep us updated :)
Baily - GOOD for you!!! Doesn't it feel good to actually DO IT, rather than "say" you'll do it? haha... you're wayyyy better off than many out there. Great work sir, i tip my hat to you.
I really got serious about my EF when I decided to go to grad school. I realized that I might not make enough to deal with even a small emergency (~$100) without putting it on a cc.
Allocating funds to an emergency funding options is better specially today where every corner of the country's bad beaten by the recession. Job loses and company closes even the one of the top company in the world, Microsoft. They had a decline in revenue and the first round of layoffs in company history, according to CFO Chris Liddell. Saving money in an emergency fund is necessity instead of purchasing luxuries. Having an emergency fund helps a lot especially when unexpected event or financial necessities comes. Lowering your credit card first and save in an emergency fund options so that for the unexpected event of financial shortage there is you can use.
Yessir, well said.
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