Financial Peace in an Emergency
07 Mar, 2021
I’m writing this blog post on the fly. It might even be the quickest and shortest one I have ever written!
It’s 10.55am on a Thursday and my inbox has just received yet another round of invoices for payment. February has been a particularly expensive month with a number of invoices due for payment over and above what we would usually expect. Some we have budgeted for and had fully covered, others we had partially saved for or were out of the blue:
For every invoice that came in for something that I was anticipating and had budgeted for, I was able to reach over to the sinking fund bank account where I had been diligently setting aside money each week over the previous 6-12 months for that very expense. No problem!
But for the unexpected expenses, I was faced with only one option really, to reach into our $14,000 emergency fund and use that to pay the invoices. Its primary purpose is to be there in times of need when the financially unexpected happens, it’s my own “personal insurance” money if you will.
Getting sick is unexpected, having the car break down is unexpected. This is exactly why we keep an emergency fund, to take care of unexpected expenses that we don’t have time to save up for. So, with zero stress and within minutes of receiving the invoices I just reached over and paid those unexpected expenses from that account. I have now set up a weekly automatic payment to replenish the money that I removed from the emergency fund. No stress.
What could I have done if that money was not there?
If we had a credit card (we don’t), I could have paid it with that. But really that is no solution because that would just be delaying the issue, piling stress onto the situation because... I still wouldn’t have the money. Sometime between now and the credit card pay off date I'd have the stress of FINDING that additional money.
I could have used any type of pay later service out there at the moment and broken the amount I owe into weekly instalments. But that means I will be missing a chunk of my pay for the next ten weeks, which would have a big impact on the rest of my budget.
I could have just NOT paid the bill, something many people do. I could have put my head in the sand, ignored it and decided to get to it when I could, or when the company I owed money to started calling me. That’s no solution either.
So, once again, my emergency fund came to my rescue. It was money that many years ago I made a dedicated effort to save up for and it’s just been sitting there ready and waiting and easily accessible for a time such as this. Within minutes of the invoices turning up, I had completely solved my own financial problems and there is absolutely no ongoing financial hangover for the upcoming weeks and months because of a couple of unexpected bills.
There is such financial peace that comes with knowing that even though I can’t guess what the need might be for my emergency fund, in times of need it is always there and I can fight a financial fire because I have got the situation covered.
So, that’s it from me, it’s now 11.15am and I’m off to carry on with my day. Carefree.
