Hi r/PersonalFinance! I wanted to share this story about how much peace of mind an emergency fund can bring, and thank this sub for convincing me to build one.
I'd been basically living paycheck to paycheck until about 2 years ago, when I landed my first solid career job. The salary's not huge (36K since my recent raise), and my income supports me and my partner. We're pretty frugal so there's usually about 25% of my paycheck left at the end of the month. I was planning to use the money to aggressively pay off student loans, but this sub convinced me an emergency fund was more important. I saved up until I had enough in the bank to cover 8 months of normal expenses.
Fast forward to this Christmas. Within thirty days, all three of the following happen: my computer dies ($900 to replace), my car needs a bunch of urgent unexpected repairs ($1200), and my cat needs surgery ($1000). Put together that's more than I make in a month, and almost two months of regular spending!
And it's okay, because I was able to pay for it out of my emergency fund.
In the past, I would've been able to handle one of these emergencies at a time... if that! Any one of those would have put me into crisis mode - cutting back everything I could, scrounging pennies, looking into a second job. I'd have just had to make do for months with a broken car and no computer in order to pay for my cat's vet bill. I still could do that if I had to - but it was so much less stressful to be able to just fix the things right when they broke without worrying if I'd have rent money. I don't have to stay at the library until midnight to type my papers and bicycle home in the rain on the highway. I don't have to push back projects I'm working on because I don't have a computer, or bum rides to doctor's appointments because I don't have a car.
I wouldn't have considered an emergency fund before this sub because I'd always been able to manage the emergencies. I have enough friends and family and flexibility to weather financial hardships. But an emergency fund takes away so much stress. If you think you don't need one because you can manage without, just think how much more you can manage if you don't have that stress on your shoulders!
Submitted January 11, 2018 at 06:56PM by Moldy_slug http://ift.tt/2mj0um4
