From the time I was old enough to understand what money was my mom drove two things into my head:
- Always live below your means
- Always have a rainy day fund
I took it to heart, but this month was the first time I really learned just how important those lessons were.
My husband and I are in the process of buying our first house. We are doing it "old school" with conventional, 20% down. We have been saving for years and after some search found the perfect place at about half the cost of what the bank told us we could afford. It fits our needs and is well within the budget we set for ourselves. 20% down plus closing and general moving expenses means we had to save a LOT of cash, and we insisted we have that money available ON TOP of our standard 6-month emergency fund.
Everything was sunshine and rainbows until 12 days before closing. We file our taxes and due to a change in our financial situation wind up owing the IRS $1800. Great, pay it from the emergency fund and be done with it. 12 hours later, we learn there was an unexpected death in the family. We live 900 miles away, so that means a last second trip. $1000 in suits/dresses, 3 days off work, travel expenses TBD. But that is okay, because we have an emergency fund. All told it adds up to about $4000 we weren't planning on having to spend this month.
Without our emergency fund, we would have had to skip a funeral for a loved one, setup payment plans with the IRS, or worse, had to delay the purchase of our home. Instead we will buckle down on our spending for the next few months and recoup what spent from our "rainy day" fund. When it rains, it pours. Do yourself a favor and save yourself some stress, have an emergency fund.
Submitted February 19, 2018 at 09:07AM by JJs_Waffles http://ift.tt/2EOCjqS
