I just want to share my experience and how an emergency fund saved my ass.
I’m 36 and work in IT. I’ve been doing well for myself recently but grew up really poor. This made me extra cautious with some aspects of my finances, instead of having a 6 month emergency fund, I have 1 year saved in a normal savings account. For me, that’s about 15k. That sounds like a lot to have just sitting there doesn’t it? Well it’s not. I don’t have a support system, no one will bail me out of a bind, my parents aren’t in the picture, no family or friends that could help and I live in a big city. This made me want 5k more than my goal of 10k. Life is expensive, 15k goes fast.
So what happened? I got a sore neck while on a road trip. I ignored it and when I got back started biking my normal exercise route right away like a dummy. Woke up one day and my arm was going berserk. That sore neck turned into an (almost) herniated disk in my neck which mangled the nerve to my left arm, fun stuff.
What impact did this have on my situation? Well, I didn’t sleep for over 100 hours because of the pain and then I missed 6 months of work. Aha! Emergency fund to the rescue. I live in Canada so the medical costs were minor (I paid for an MRI out of pocket at a private clinic so it could be done right away, no wait time) but there were some. I also was paid 2/3 of my salary while on leave but the deductions are the same so that’s closer to 1/2 my normal take home. That’s enough to cover my very cheap rent, bills, and most of my food. Some of my food money was drawn from savings, I mostly cook at home too. Anything else is coming from savings. Ok so I whether the 6 months fine and return to work. My injury is for life so it never fully goes away. Turns out it’s very easy to relapse and I did. Missing another 4 months. During that time my sick leave from my work benefits ran out and I had to switch over to government run employment insurance. This process was brutal and long, I didn’t get a single deposit in my account for 6 weeks, I was down to 2 months of emergency fund left before my claim went through. I would have had to take out a loan or maybe ask my employer for an advance or go back to work regardless and risk my health.
All said and told, this has cost me somewhere around 20k in lost wages and life expenses. Think to yourself, could you live without 20k of your take home salary (not gross, after taxes)? I live alone with no kids so I could, barely. If I had a 6 month fund, I wouldn’t have enough to stay on leave, what would I do then? What would you do?
I was just very lucky that I made my own safety net out of adamantium. I tailored it to my needs and my situation and was even a little extra cautious. Take heed.
TLDR: Borked my neck, missed 10 months of work and am down 20k in missed pay and expenses. Without emergency fund I would have lost my apartment, job and health as well.
Submitted May 23, 2018 at 04:22AM by DonkeyFace_ https://ift.tt/2kgHpAk
