Drama in Real Life: When Emergencies Pile Up
Last week, I mentioned that my cat just died. Not only was his passing heartbreaking, it was expensive. But as I said in that post, I was very happy to be able to write a check from my emergency fund and not worry about where the money would come from.
Since I’m still paying off debt, that $800 check represented most of my meager emergency fund. I’ll rebuild it over the next few months, but in the meantime, I don’t have much of a cash cushion. I have to just hope there won’t be any subsequent emergencies.
As luck would have it, there already has been.
When it rains, it pours
Two weeks after my cat’s death, I developed a nerve problem that temporarily crippled my hands. The cause is unclear, but my neurologist recommended some changes to my work routine while he runs tests looking for the root problem.
Suddenly, I was facing medical bills, expensive new equipment, and software to enable me to work, plus a vastly reduced workload while I waited for my hands to heal. How was I going to cover this with only $200 left in my emergency fund? Especially the week before Christmas?
If I were ever going to reach for a credit card again, this would seem like the right moment to do it. But I didn’t. Instead, I buckled down and followed Katy Wolk-Stanley’s excellent advice to “make it do or do without“.
Instead of buying a new adjustable-height desk, for example, my husband and I renovated my antique writing desk to turn the front drawer into a hidden keyboard tray for my new ergonomic keyboard. I borrowed that expensive dictation software from a friend who had switched computer platforms and no longer needed the Mac version. Though my friends with RSI swear by the Alexander Technique, I decided that could wait until my finances have recovered a bit.
Borrowing from myself
I still had extra expenses, though. The past few weeks have seen me at a doctor’s appointment almost every day. Even my small $15 to $25 copays add up to big bucks when I see so many doctors. In addition, I’ve had to pay for medications and a few pieces of equipment, like protective foam pads for my elbows. That all quickly drained the $200 left in my emergency fund.
Rather than borrow the extra funds I needed from a bank, I borrowed them from myself. I had the money stashed in accounts earmarked for my taxes, my kids’ tuition, and our family trips. Those are all priorities for me. The tuition and taxes are essential, large expenses. I couldn’t just take the money. But faced with a health crisis and a depleted emergency fund, I borrowed a few hundred dollars from myself.
This month, I’ll redirect part of my debt snowball to repay myself. This sets back my target debt-free date, but that’s a whole lot better than being unable to handle unexpected expenses at all — or being forced to take on new debt to do it.
Rethinking priorities
This was the first time I’ve had to make a choice about what to do if my emergency fund runs dry. In the past, before I managed my finances at all, every month was a crisis. There was no emergency fund, just a growing pile of credit card debt and a sinking sense of panic.
Since starting to manage my money, I’ve been able to handle any unexpected expenses with the money I had coming in that month. I’ve been lucky to have minor calamities like car repairs and vet bills be spaced fairly far apart. Keeping my emergency fund at $1,000 has seemed like a reasonable choice. Now it seems woefully thin. That thousand dollars was easy to spend fast when a couple of real emergencies cropped up in quick succession.
Will I shift gears and save more in my emergency fund? Probably a little. I still think the debt snowball approach to paying off debt before building up savings is financially sound. My loans are all “low-interest” now, but even a low interest rate on a loan is several times the interest I earn on my “high-interest” savings account. If I build up savings while I’m still paying off those loans, I’ll be paying a premium for the privilege of having money sitting in my savings account.
That’s a privilege I may well be willing to buy now. Having gone through a recent spate of emergencies, especially ones that cost me a beloved pet and affected my own health has left me feeling fragile. Money isn’t only about math, as J.D. is fond of reminding us; it’s also — maybe even primarily — about state of mind.
Making adjustments
I’m working hard to manage my finances mindfully because I want a firm financial ground under me as I raise my family. Having only a small emergency fund feels a little less firm to me now than it did a month ago. It’s going to take me a month or two to get it back to its old level, and I may just continue making larger contributions to that fund.
That would mean paying my debts a little more slowly, and ultimately paying more in interest over the life of those loans. It might be worthwhile to me for a stronger sense of financial security in the here and now, though.
Even more important than the money I spent on my crises this month, I’m taking note of the money I didn’t spend. I was raised in a household where throwing money at problems was the thing to do. This time, I managed to take a deep breath and stop the spending whirlwind before it even really got going. My approach kept the tempest in its teapot, turning a potentially expensive set of emergencies into manageable ones.
Next time an emergency crops up, I’ll have more than my emergency fund to fall back on. I’ll also have the knowledge that I don’t necessarily have to spend money to solve every problem, even in an emergency.
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There are 76 comments to "Drama in Real Life: When Emergencies Pile Up".
There are probably a lot of people that would have just reached for the credit card if they were in a situation like yours. Great job for not doing that!
I think there are always alternative solutions. If you really need $50, you can probably find a side job that will pay that. Problem solved. Reaching for that credit card is never the answer, especially if money is tight and you don’t know if you’ll be able to pay it off right away.
Sorry about your cat. I think you are doing great and just keep at it. Once your debt are paid off, then you can build up a bigger emergency fund.
I like that you are borrowing from yourself though, better than paying the interest to the bank.
Sorry about your cat, that must have been very sad…
I know you are forced to borrow from yourself, but I think it is an accomplishment that you have backup funds to borrow from instead of being forced to use the credit card. That in itself is a small victory. So focus on that instead of worrying about the extra time it will take to get out of debt.
You are so right, these things all seem to happen in clusters. Hopefully you are done and life can go back to normal once they have a diagnosis for you. Good luck, I am sure it is frustrating.
I’m impressed you managed to keep off the credit card. From bitter experience, here are my frugal tips for RSI pain:
1) warmth. relaxes those tight tendons and muscles, and can reduce the pain. Do you have one of those wheat bags that can go in the microwave? or a hot water bottle? they’ll help and hopefully cut down on your med use (which is good both financially and in terms of side effects). I found that simply immersing my hands in a sink of warm water would bring blessed relief.
2) prevention. Dictation software is great if it works for you (not so good for me in an open-plan office…) Rigidly enforce screen breaks. I use a freeware program called workrave, which is very nice, but not Mac. Looks like AntiRSI might be a good alternative, or simply use a kitchen timer. Find something that works for you, and stick with it. Forever. Once your symptoms decrease, you want to stop them coming back. (Yes it sucks, and it’s annoying, but it’s worth it). Also, it’s a good idea to at least temporarily give up any hobbies that could make things worse (e.g. knitting or computer games).
Good luck. I hope you start feeling better soon.
Feeling a sense of calm when the unexpected comes is a good feeling. Having the money to deal with it gives us a sense of peace. I think that’s what the emergency fund is all about. Imagine how you would have felt if there had been no E-fund at all?
Hopefully, you’ll be feeling 100% again in no time.
Hope your health improves soon! I know what it’s like to have to adjust financial goals due to health. Best wishes.
A great example of why it’s important to have an emergency fund, no matter how big or small.
In 2009, I developed a very random problem of tingling and/or electric shock in my hands and feet. I researched on the interent and found out that the symptoms were consistent with low Vitamin B12.
I took the active form of B12 (in other words, the form of B12 after the body has metabolized it) for about 6 months or so and the symptoms cleared up, most right away.
The active form of B12 is methylcobalamin.
It sounds like your situation might be slightly different — but taking an active B12 supplement might help. It was also a nerve issue for me.
Great idea renovating the desk drawer! I think you will also find the new keyboard helpful. As a self-employed transcriptionist for over 14 years, I switched from a standard keyboard to a natural/ergonomic one over 10 years ago and it made a tremendous difference in the pain that was starting to develop in my wrists (early carpal tunnel).
Just wondering about that picture of you typing. It looks like the lower part of your palm is resting on the keyboard tray. That may cause nerve impingement. You may want to try keeping your wrists straight so they do not rest that way (I learned this from personal experience, especially being on the computer for so many hours a day).
One tip against RSI: the problem you feel in your hands (wrists/elbow/arms) usually originates from the shoulders. My physiotherapist put me on a training schedule including rowing to increase back and shoulder muscles and all my (quite persistent) wrist pains vanished in 3 weeks.
Good for you. Hope things are back on track soon.
Adding on to #7 lostAnnfound, it might be the camera angle, but it looks as if your laptop could use a textbook or box underneath it to get it a better height. My DH is fanatical about ergonomics and RSI so we’ve got all sorts of workstation modifications.
Oh, I really like this post – I liked the real-life story and I completely related to the taking-a-deep-breath part! This is exactly the kind of thing that would cause me to reach for my credit card and shows the behavior which my husband is trying to coach me to do. 🙂 Great job – and I’m so sorry about your cat, I know that’s really hard, and I’m sorry about feeling fragile. Good luck!
Great job getting through all that. I definitely know how things can pile on. We have been fortunate, but last year we had a 650 dollar repair bill to cover. At that point we didn’t have an emergency fund. We do now but at the time we just borrowed against our student loan payments like you did. That’s a great way to ward off credit cards.
Sorry about the loss of your cat and also hope you are on your way to better health! I had been saving for my dog’s teeth to be cleaned but she had 3 tumors that needed to be removed and tested. Putting her under anesthesia once to do it all was the wisest choice however I wasn’t excpecting the added procedures. I was on the fence on how to pay for it, I ended up paying partially from the e/f and borrowing the remainder from myself from different hack accounts/stashes I made slowly over time and forgot about… they came in handy!
What I particularly took from this post is that saving money and paying off your debt is not that glossy, glamorous journey that some self acclaimed financial gurus would have us believe. Even when you are in a good place, life happens. It is how you choose to deal with life when it happens that makes a difference.
Thanks for this article Sierra. I hope you get completely better soon.
I know a lot of you are against credit cards to use as an emergency, but I feel it can be used as a tool.
Say you have $1,000 in your e-fund and get hit with a $750 unexpected bill… If you have a 0% credit card, I say use that card and keep building interest on the e-fund. If your 0% card is only good for 5 months, pay what you can, and if it’s not paid off when the 0% promo is up, use what you have to in your e-fund to pay it off.
Hello Sierra,
I really wanted to address the situation with your hands. I’m sorry to hear they are temporarily crippled. Have you ever thought about wearing wrist braces while you type?
I am a fulltime stay at home transcriptionist working for 11 years fulltime up to 12 hours a day at times typing, typing, typing, all day long (paid by the audio minute so more typing, equals more pay). I do not have carpal tunnel and could not have lasted this long had I not taken care of my wrists. I never, never type with out support wrist braces as a defense against carpal tunnel. I strongly suggest for the sake of your wrists and your career you try this. It has worked for me and I hope it will work for you.
And as an added precaution, I sleep with my wrist braces all night long to keep them straight all of the time. Again, it’s not 24 hours a day with the braces on but it’s the 12 hours I work and the 7 hours I sleep. Other than that I don’t need to wear them. But wearing them this much, I’d rather be safe than sorry. And it has worked for me.
Also, the hidden keyboard tray is a great idea, but if that doesn’t seem to work for you, you might want to try placing a curved keyboard, (without the obvious break in the keyboard as shown in your picture) on your lap and see if that helps. For 10 years, I’ve just used the cheapest standard keyboard available, placing it in my lap while typing, and using my wrist braces and I have never had any problems. I don’t believe that doctors emphasize enough the absolute need to keep your wrists straight and perfectly still while you type and let your fingers do all of the work. For all those who type regularly for their professions you should consider wearing wrist braces to keep your wrists safe.
I’ve provided the link for the wrist support braces. They are $22.95 each, one specifically for the left and one specifically for the right. The wrist braces with thumb holes on both sides are not as effective for holding your wrists in place as a brace specifically designed for each hand. Believe me, I’ve tried to be cheap and buy those and I have had pain within a couple of days.
I can’t tell you how much this struck a cord in me. Being that we both make our livelihood from typing. You have all of my sympathy. I hope this helps. And my wish for you is to recover soon.
http://thetranscriberdiaries.com/tools-of-the-trade/
Great post Sierra.I too have been dipping in my emergency fund and watched it fall due to some recent bad luck. It is heartbreaking. Our savings have not been building so quickly as my husband and I decided for one of us to stay at home with our son. When we dip into the account we list our blessings and detail how fortunate we are to have the savings, as that is what it is there for. Still, I miss the “good luck”. To some, we have “good luck” I still have a job and we have health care. I suppose it is all how one looks at it.
Sierra,
That is a wicked-awesome hack! Thanks for the link-love to The Non-Consumer Advocate.
Katy Wolk-Stanley
“Use it up, wear it out, make it do or do without”
I know what you mean about $1000 seeming insufficient. Naturally it’s better than nothing, but boy, it sure doesn’t take much to drain it! And good for you with your resolve to pay yourself back! Takes a lot of self-discipline. Hope your hands get better soon.
i can sympathize with your plight. i also had $1000 in my emergency fund, $800 went to ferret surgery last summer. a couple months after, the little weasel ate a banana peel and we had to rush him to the emergency room (nana peels don’t go down well)… another $500.
the silver lining is that we both did the same thing- i poached the extra cash from my travel account. there’s no beach trip coming up in my near future, but at least i have a healthy banana-peel free ferret who is NEVER ALLOWED near bananas again.
also i’m making him get a job. he’s the biggest freeloader. you should see his kibble bills.
the emergency fund is s-l-o-w-l-y building back up though… somewhere around 350, which is better than nothing.
Sierra, I really respect your discipline and mindfulness, especially in the face of grief over your cat, medical problems and, I assume, physical pain. It’d be much easier to panic and revert to old habits, including credit cards. Warm wishes and blessings!
Sorry to hear about your problems. When it rains it pours, doesn’t it? Some good advice to try on the medical front, but what I want to emphasize along with others is the importance of having an emergency fund. This month I had $3,000 in unplanned car repairs plus the holidays and a long planned (and uncancellable (sp?)) trip. If I didn’t have $10M+ in savings, the car could have thrown me totally back into debt. However, with this cushion I was almost serene about it all. Seriously. I’m saving for a new (used) car to pay cash for and am seriously considering cancelling all my credit cards and just using a line of credit at my bank as a substitute for a credit card. The only reason I don’t is for the protections. It is so worth it to shore up your fund even at the expense of paying down substantially your bills for a few months. Get it up to $500 – $1000 if you can, and then you should have anything short of a catastrophe covered as long as you keep feeding the fund even when you go back to aggressively paying down debt. Feel better, Sierra!!
I know exactly how you feel, at being relieved for having an emergency fund! Though we have been lucky and haven’t had any medical emergencies, we have had to dip into our emergency fund (hovering around 6,000 right now) to pay for a new laptop hard drive when I dropped it, a plumber to snake the toilet (though he did give us helpful tips on buying our own auger if it happens again), minor car repairs last month, and a $750 deductible for a car accident last year.
Every time I reach into the emergency fund to pay for these events, I get two very conflicting feelings. It is definitely a relief that I don’t have to worry about how to pay for those minor ($150-200 each) unexpected repairs, even when they happen in a short period of time. But then I see the balance in my fund drop, and it makes me more motivated to save more money!
Although we have a solid emergency fund, your comment about “borrowing from yourself” struck a nerve with me. I haven’t been directing money to savings for future expenses, since all of it has been going to student loans, retirement savings, and building the emergency fund (the goal is to reach $10k, but that’s a ways off). I think 2011 will be the year I actually implement my plan to save for future expenses!
I have to say the borrowing from oneself is the way I am building up my emergency fund. I make regular deposits of $30 twice a month into it. However if I ever need to borrow from the fund when I pay it back I pay 1% of the outstanding balance monthly, and an additional 10% of the borrowed ammount once paid back. Two car repairs for a total of about 2.2k boosted the account an additional $300 because of the interest I had to pay myself.
I can real relate to your situation. Since I was diagnosed with a chronic illness two years ago today, my monthly health care expenses exceed $600/mo. Its no long a one-time emergency situation. I constantly borrow from myself, even if its a minimal amount.
I love how you worked with what you have without compromising your health and well-being. I think sometimes we can take the “do without” part way too far.
I can real relate to your situation. Since I was diagnosed with a chronic illness two years ago today, my monthly health care expenses exceed $600/mo – every month. Its no long a one-time emergency situation. I constantly borrow from myself, even if its a minimal amount.
I love how you worked with what you have without compromising your health and well-being. I think sometimes we can take the “do without” part way too far.
Sympathies about your sweet cat. I hope it’s some comfort to know that you did all you could.
You are right – $1000 isn’t nearly enough of an emergency cushion. Definitely a minimum.
I think your approach to handling your unexpected bills is fantastic! I’ve done this myself before. I’ve also struggled with RSI for 3 years now. Unfortunately it doesn’t really go away, but it is very manageable over time. I was lucky when I first figured out what it was b/c I had a boss who had struggled with it. He introduced me to the 3M Ergonomic mouse- some of the best money I’ve ever spent! It takes a few days to get used to but seriously helps reduce the strain on your hands and wrists.
I’d agree with the commenter about the pain coming from the shoulder. That’s where mine originated from. I spent about a year in chiropractic treatment which helped to heal the areas enough where i could manage the pain myself. Now I treat by limiting my time on the computer- which is hard when you work 2 jobs that both require being on the computer (graphic designer!). Also exercise is the biggest thing I have found to control and also alleviate the pain. I walk almost daily now. Bloodflow through the pain areas makes a big difference. Also, don’t forget to stretch your arms, shoulders and neck area before you begin computer work-that helps too!
Love your keyboard tray hack!
Sierra:You say your hand problem has to do with the nerves. Here is a suggestion that might end up being a whole lot more effective and cheaper than going to ten thousand doctors. I’m a massage therapist, but also a trigger point therapist. It is entirely possible that the problem is that certain muscles, probably more in your neck, than in your hands, are contracting with trigger points and basically squishing the nerves that run to your hands. (I’m intentionally not using medical terms because most people are not familiar with them.) I’d suggest you order the book, “The Trigger Point Therapy Workbook” by Claire Davies. Then you’ll need to order some basic massage therapy tools; I’m guessing a Shamala Tool, a Knobble, and possibly a Theracane, and you can buy 6″ rubber balls from any dollar store. You didn’t say exactly where your pain is, so I don’t know if you’ll need to work on your own back muscles. If you don’t, you can save roughly $25 on the theracane, so you’d be looking at roughly a $50 investment. If your hands are totally useless,you’ll have to have your husband treat you, although here’s a hint; many men don’t have the sensitivity needed to work on woman because they tend to press too hard. In which case, your daughter, mom, sister might be a better choice. You’d be amazed at how well even fairly little girls can do this.
Also, most doctors have never heard of trigger points, and if you mention that you’re using trigger point therapy, they might very well panic on you, so personally, I wouldn’t mention it to them. No matter what treatment he’s recommending for your nerve problem, trigger point therapy can’t hurt you. It may not be the solution to your specific problem, in which case, you’ve lost $50. But to my mind, it would be a tragedy if you spent thousands of dollars on treatments that ultimately don’t work, if you skip the cheap one that might work. You’re welcome to email me if you have questions; I’ll talk you through it as much as I can.
As a contradiction to #17 – whether you wear braces while typing or not should depend on what the problem is.
I have tenosynovitis in my wrists. It’s an inflammation of the sheaths through which the tendons pass, which leads to compression on the tendons which rub together, which leads to more inflammation in a vicious cycle. Compressing my wrists while moving my fingers is the worst thing I can do, because it makes the problem worse by making everything press together more.
What helped me the most was wearing my wrist braces as I slept – the doc pointed out that we tend to put our wrists in funny positions as we sleep, and with the braces they were held straight for eight hours or so each day, which allowed them time to heal.
Now when my wrists start acting up again, I reduce their use (since I’m a webmaster at work, this means no typing at home) and wear the braces at night, and it clears up within a few days.
I too spend 8-10 hours a day on the computer. I tried the wrist braces and hated them! What I do find works is a curved/split keyboard. But most are not ergonomic in that the rear edge tilts up forcing your wrists into an unnatural position – like in your picture. I raise the front edge about an inch and my wrists stay in a fairly neutral position. Works well just using the laptop too – great for when I travel.
Sierra — Lots of people have chimed in with their hand-related problems, so I don’t feel bad about doing the same. I have Ehlers-Danlos syndrome, which means that my joints constantly dislocate, particularly if I am tired. It started to get really bad when I was 13, so I have been dealing with it my whole life.
I was very fortunate when I was young to have a doctor who made it clear that you can have a disease or the disease can have you. He told me that I could do anything I wanted to do, as long as I was willing to take the consequences and not complain about them. This was very liberating.
Over the years and through surgeries and recoveries, the most helpful thing that I have learned is to work up to my pain threshhold and then STOP. Working through pain is not the answer. Learn to pace yourself and do productive things while giving your hands a breather. For me, at different times in my life, this meant only typing or holding a pencil for 15 minutes. It will vary.
Good luck, and remember that you have a support group out here!
Sierra, thanks for this personal story. We appreciate you!
I’ve had problems from typing/driving badly, but I found a free solution that may work for you as well. http://www.egoscue.com has exercises posted online that got rid of my carpal tunnel syndrome in 3 days flat – about 15 minutes of exercises.
I like free, and I like fast, and I like easy.
Get well soon!
I’m in a similar situation regarding the emergency fund. We’re taking a trip to Scotland in 6 weeks – the package is prepaid, but all free cash has been going towards incidental/spending money for the trip. However, now it seems we need a new roof. I have some money in an emergency fund, and I have family who will lend the rest, but now all that extra cash will have to go to restocking the e-fund and paying back the family. I don’t quite know yet what I’m going to do. I do have a few other accounts I could borrow from. I have already stopped charitable donations and cut my Roth contribution in half. I’m unwilling to carry a balance on my credit card or reduce my 401k contributions, though both are a possibility. I’m just hoping that our yearly bonus, due this month, will “save” me, though I hate so much to count on bonus money like that.
Good luck to both of us. 🙂
I know I’m going to get filleted and grilled for this, but… I noticed that many people spend what I would consider to be extraordinary amounts of money on their pets. People claim to be struggling to become debt free, yet they plunk down hundreds if not thousands of dollars a year on vet bills, pet meds and normal upkeep of those pets. And as the recent economic downturn demonstrated when people abandoned their pets to the streets or to animal shelter, they are a huge financial burden (an PLEASE don’t equate pets to children in this regard, as many people tend to do when confronted with the idea that pets are huge financial burdens!).
I hope that Sierra, in the interest of her debt elimination strategy, delays getting a new cat at least until she can do so without undermining her own financial efforts. I do sympathize with the loss of her cat, but she should take this opportunity to evaluate the expense of owning a pet at this point in her life.
I love my keyboard and mouse wrist support pads that I got from Office Max–they are made from a soft flannel-type cloth with tiny beads inside, like a bean bag. You could probably make them yourself if you were so inclined. I like them because they don’t irritate my skin like the gel support pads do, plus they keep my hands from craning up and bending at the wrists. I set my keyboard flat on the tray, and the support pads keep my hands flat like a piano player. I can really tell the difference if I am not using them, my hands get achy very quickly.
Best of luck to you
I admire your determination not to use credit cards! I’ve long felt the Dave Ramsey $1000 emergency fund should be $2500 for most of us with kids.
I really like the concept of borrowing from a vacation fund – you were very fortunate to have that option. Last year, we started targeted savings accounts so it may be something we end up doing as well.
I follow this blog pretty religiously, but I mostly read the articles for the information contained and don’t necessarily pay attention to the author or the “history” of the articles they’ve written in the past. When I read Sierra’s original post about her cat, my reaction was, “wow! she must be doing really well for herself financially, to be able to drop $800 on a cat and not bat an eyelash!”
Although I know that everyone has different perceptions of “wealth,” after reading this post I was completely amazed that the woman I’d thought was well-off from her last article actually depleted 80% of her emergency fund.
I think it shows how sound financial management can make a big difference in your attitude. When your finances are out of control, spending an extra $800 seems very daunting, even if you have lots of money in reserve. When you have true control over your spending, it seems you can virtually deplete your emergency fund and STILL have a positive attitude about it.
(Or maybe Sierra is generally a more positive person than I am.) Either way, I found this post informative, interesting, and personal, which always makes for the best GRS articles.
I can totally relate to this story. After an illness last year I took on an additional 2,500 in medical bills while paying off debt. I just built our EF up to 1300 this morning, then got hit with an ugly insurance bill that had to be paid in a few days or the policy would expire. I was able to pay it and move some money over from another account to bring the EF back to 1K. It still gives me a gross feeling….a whole month of savings is gone, but the bill got paid, and I didn’t put it on my credit card. Progress not perfection.
We actually combine our emergency funds with our targeted savings funds… so Sierra’s case wouldn’t have depleted our “emergency fund.” If we haven’t spent it yet, it can be used for emergencies without guilt! Of course, we also replenish the entire thing as soon as we can each month.
I don’t keep a specific “emergency fund” specifically for the reason in this article: in a true emergency, all your liquid assets become fair game. I *do* keep cash on hand so that I can handle things like this, but if I have to raid the vacation fund or something else in the case of a real emergency, then I can. I also try and keep a cushion of $2000-3000 or so in my checking account, and so I can absorb most minor emergencies without doing anything special at all.
Sorry about your hands, I hope they feel better.
Edit: Hey, it’s apparently “Nicole and I agree day”! How about that, haven’t seen that one too much lately. 😉
I have to have targeted savings. Otherwise, in an emergency I forget about the money dedicated to paying the annual bills ex. property tax, and it isn’t there when I need it. A separate account acts as a “do not touch” barrier. The travel account in this case is also inviolable, as the trip is booked and paid for and we’ll need cash while we’re gone. However, the car fund, school fund, and investment fund are fair game.
I am sorry to hear about your cat and I wish you well.
In opinion, it would have been a better idea to find a cheaper solution for your cat, like bury the cat in the back yard or something. Spending 800 on an animal just seems to be a little outrageous. My dog died a couple of years ago and i chose to cremate her. The cost was 125. Afterwards, i thought that it wasn’t worth it.
I think that people nake choices on what they think is important. If you could not afford the $800 then don’t spend it. My mother in law once gave us some good advice, before she passed. She told us that when she was not going to be here much longer but we have to realize that we still must live after her. I want to tell you the same thing, you still have to live after your cat. You still have a future to think about.
Really great article! I admire you for slowing down long enough to think of alternatives to debt to solve these problems. I have a bad habit of immediately panicking and reaching for the credit card, just to make myself feel better in the short term. Good for you!
And I’m sorry about your cat. 🙁
@42 Tyler K., my original version said, “I’m surprised Tyler K. hasn’t posted this yet but…” But on second thought decided it was extraneous.
If you’ll recall, we’re both at the income/cash-flow level in which Liz Pulliam Weston says we do not need to budget and can a lot more lax about our finances. (But even when I was poor our emergency fund and our targeted savings were the same fund.)
Also I DID agree with you that perfectionism could be a good thing, just disagreed that it couldn’t be a bad thing. I thought nobody was wrong (but everyone was wrong for saying the other was wrong). Ah, online drama.
Loved this post Sierra! This is a situation we all find ourselves facing. Last year was the first year I committed to building an emergency fund and contributing to it every month. When I had $1800 in the account, a pipe burst in my house underneath my kitchen floor and it cost $1600 to fix (which my homeowners insurance didn’t cover). I thought that I would be upset about spending the money, but when it came time to do so, I was just really glad I had it.
It did teach me that a much larger emergency fund is needed in case emergencies pile up.
Bottom line is, part of good personal finance habits is the ability to adapt to changes and not let small setbacks get in the way of your dream of financial freedom.
I hope your hands feel better soon. Take care of yourself!
I’m 27 with no kids, but one cat. My cat IS my kid. She’s a very, very special cat. I’m so sorry to hear of the loss of your cat.
I keep a $6000 emergency fund. It sounds like your medical coverage is stellar if all you pay is under-$30 copays. I am guessing that is through your husband if you are a freelancer? What if he lost his job? You might be looking at $600 or $800 per medical visit, depending. I pay $400 each time I see a doctor and I have health insurance.
A cat surgery can cost much more than $1,000. So that alone would blow a $1k emergency fund. I think the point is to imagine a disaster and figure out what would cover it. I guess my rule of thumb is to figure out what the 90% disaster would be — in other words, barring the top 10% of cataclysmally bad events happening all at once, what would it cost me to cover those without going into debt. That would be, for me:
-Loss of job
-Cat surgery ($1,000)
-Major medical emergency ($3,000)
My $6K emergency fund would cover me through about 3 months of living expenses in this dire situation. The 10% disaster would be a loved one would die, necessitating a trip across country.
If I had kids, I’d probably estimate a $10,000 disaster of unknown specification. If my kids got sick or something, I’d want to feel completely comfortable pitching a bunch of money at the problem.
You know, I think you did and are doing the right thing. You basically prioritized your money. Emergency fund is for emergencies. You did the right thing. I think it’s Ramsey that would have likely told you to use your snowball to cover any emergency that exceeds your fund but if you have a travel fund I think that should be tapped before the snowball, which is precisely what you did.
I have to say, you’re one of my favorite writers on this site. I find you to be very honest and completely relatable. Sometimes I find myself thinking you agonize too much about your spending but then I realize that’s the kettle calling the pot black right there. You agonize the way I do and you don’t give yourself much slack or credit either. And even though you’re light years ahead of where I am, you’re where I want to be and still in it so I find you to be a great encouragement.
I really hope your hands heal soon. Take it easy. 🙂
Good luck with your medical expenses. I can attest to the “piling up” you experienced. This summer we had higher than estimated medical costs for the birth of our daughter and then a couple months later our HVAC needed replacing. 10 years ago this would have almost bankrupt us but instead just put our other saving goals on hold until we replenish the emergency fund.
You did a great job. I’d like to add one note: don’t put off repair and (especially) medical bills because you don’t have/ want to spend the money. I’ve been avoiding an expensive car repair even though I knew it was risking real trouble … finally biting the bullet and just doing it. Putting off needed medical treatment (for people or animals) is even more dangerous and likely to lead to tragedy or at best, bigger expenses down the road.
Sierra, your story was definitely inspirational. I had an emergency pop up yesterday that’s throwing off my plans of eliminating debt and planning a wedding. You may not know it but you just gave me the courage I needed to keep going. Thank you.
Sierra,
Thanks for the great article. Like many people who have responded, I have had a similar situation these past few months. My mechanic told me that I was going to need a new clutch back in June. They estimated about $600, so I dutifully saved that much, on top of my emergency fund of $500 (I am a graduate student- poverty is my middle name). Then, in November, the car died and it turned out that it wasn’t the clutch, but the transmission AND the clutch- a $3500 package for a car worth less than $1000. I used my emergency savings to put a downpayment on a small used car (2008 Toyota Yaris), but the idea of 1) accumulating more debt and 2) spending my entire emergency fund was a real bummer, to say the least.
I cut down on Christmas gifts, did a bunch of research studies for extra cash, and have tried to be as frugal as possible, but random expenses have come up in the past two months and I have started putting them on my credit card. I feel like, in a certain way, this website makes me feel worse about my situation as a student. I receive tuition assistance through my job, but this restricts the hours that I am able to work (I can only work 29 hours per week in order to receive that benefit), so my income is limited. In an attempt to come out of my PhD program with less than 60k in student loans (not an easy thing for my program), I have limited the amount of loans I have taken out, which means that the living assistance that I get is very small. On top of all this, I am trying to get out from under my “early-twenties-bad-with-money” credit card debt and trying to stay on track with my finances.
It is REALLY hard. I don’t have a “travel” fund to take money from. I don’t have other expense accounts that I can borrow from, in the event of problems. Up until the last week of December, I had been credit card use free since the beginning of April and considered that a real accomplishment.
I really appreciate articles like this that highlight how difficult it is for everyone, not just starving students, to stay away from the credit cards. I agree that $1000 isn’t enough of a cushion, but like Sierra, I’m not sure if it’s more important to build that cushion higher or to keep on with my agonizingly slow debt snowball.
Anyway, sorry this is long-winded. I think I needed to get some stuff off my chest. 🙂
Great story, sympathies and good healing to Sierra.
I recently hit my target for my EF of $5K. That’s enough to cover rent, utilities, and enough food to keep us alive for two months.
Doesn’t sound like much, does it? This is where high-cost-of-living environments have to be considered. I’m working hard to get us out of here so we can last longer than two months on $5K.
While building the EF, I was constantly borrowing from myself (thanks to online banking and linked savings/checking). If something came up that I decided to use my CC for (car repair, vet bill), I immediately paid it off from savings, then bumped up savings in the next pay period. I did this instead of reducing debt repayments in my spending plan.
Also, as I always do, I’ll add a plug for the Health Savings Account. We never have to worry about co-pays, or the myriad services our insurance doesn’t cover, thanks to the HSA.
I hope your hand problem resolves soon. One thing that I believe helps with the copays is a flexible spending account if you have access to one.
My condolences about Monster, I know how losing a beloved pet feels.
I hope I don’t sound harsh with this comment but I think I have a valid point to make about financial choices:
When I first read your story about choosing not to take out pet insurance, I that thought you may have a point. But that was before I was more aware of your financial situation. Now I read this I can’t help but think ‘that’s why you get pet insurance’. If you bought pet insurance and your cat got ill next week, you’d have several thousand dollars worth at your cat’s disposal RIGHT AWAY, whereas relying on your emergency fund (which you’ve only just depleted from the last vet bill) means you don’t currently and it’ll take several months or longer to build that kind of cash up. Also, you’d have the peace of mind that if your new kittens got ill, you’d be able to pay for their care WITHOUT worrying about it draining your emergency fund.
I can honestly see your reasoning not to purchase pet insurance but I think your thinking is maybe biased from having a cat that was lucky enough to remain relatively healthy right up until near the end of its life; your next cats might not be so lucky.
I’m sure you have a plan B in the back of your mind but I just wanted to put the other side across, the reason why one might purchase pet insurance in this situation.
I’m sorry to hear about your cat — we lost our dear cat 4 years ago and still miss him. I’m sorry to hear about your ill health, as well. As someone who sits at a keyboard all day, I can relate. Good job keeping it all in perspective and not letting it derail progression.
Hey Sierra, just wanted to say I suffered a lot from RSI, not as bad as you from the sounds of it but I had a physio and really weird mouse and various things, but in the end I found the thing that helped me most was a power ball. It honestly changed my life and for less than £15 (around $30 I think, probably less) on amazon. It just strengthens your arms wrist and shoulder. I use it on the way to and from work (10 mins walk each way) and I’m virtually pain free now. Anyway, really hope this helps and good luck.. Lewis
Sierra, I’m so sorry to hear about your cat. I had a slew of expenses after building up my emergency fund, too. New struts for my car ($800), a dog ear infection ($180), and a burst pipe at home ($200). But, like you, I was able to manage without resorting to my credit card. I’ve been selling stuff on ebay and CL and was able to use that plus the emergency fund. I’m wiped out, but don’t have more debt, just less savings. Back to square one, and am continuing to de-junk to raise my savings. Best wishes to all of us for a better new year.
I see you’ve gotten lots of replies with medical advice, so without having the time to read through all of them, here’s mine… 🙂
When your emergency fund builds up again, try a Rollermouse. I had tendonitis in both hands, and have used one for the last 8 years or so. I wouldn’t be able to work without one!
http://ergo.contourdesign.com/products/product-detail.aspx?id=2
I think the reason many people shoot for the $1000 is because they might never make it to a $2500 emergency fund with debt hovering over them. They would feel defeated or like it was too lofty of a goal especially since alot of people are living month to month as it is. $1000 is realistic for an average wage earner to shoot for so they can start attacking their debt.
@36 Walter. I agree. Ferret surgery? To me a HUGE waste.
Sorry to hear about the string of misfortune. After all of this, looking back, do you think your original emergency fund was too little?
In the interest of harmonious dialogue, I think we need to respect each others’ priorities and accept the fact that they will certainly differ. Hey, some of us think that children are the ultimate waste of time, energy, and money, but I personally would not offer up that opinion to a friend who was struggling with medical expenses for a child.
Congratulations on finding a way out of your predicament without taking on new debt. Thanks for sharing this experience.
Don’t beat yourself up over having to pay some additional interest on your debt in order to increase your emergency fund. If I understand you correctly, your goal is to get out of debt, not to pay as little in interest as possible on your debt. Look at that extra interest as the price of getting out of debt for good. To do that, you need an adequate emergency fund.
This is a fabulous article and I can so relate. Unfortunately in the last month, I got hit with some unexpected vet bills, a fence to be replaced that had been blown down in a wind storm, and just yesterday, an unexpected car repair. I feel really demoralized this week, because every time I think I’m headed in the right direction, something happens and there goes the emergency fund. Or even worse, in this month’s case, I used the credit cards. I sure hope I can get back on track and rebuild the emergency fund. I’m also trying to set up some targeted savings accounts for things like house repairs or pet expenses. Thanks for an excellent article.
Enjoyed this post, it does a great job of capturing the delicate balancing act that’s often required when your household is committed to aggressively paying off debt and the inherent dangers of maintaining a modest level of savings.
I am truly an animal lover, when my cat of 18 years was nearing the end of his life due to renal failure – I was an emotional wreck. Thankfully, I had a vet who was a sensitive realist. She said that due to his age there was no guarantee how he would respond, if at all, to treatment and that he was suffering. The fact that a medical professional was so pragmatic liberated me from feeling guilty for not “pulling out all the stops” to save my beloved kitty. A crucial and obvious difference was that my cat did not get sick until the end of his lifecycle -I am not sure what decisions I would have made if he had been four or five.
Once thing I have always loved about GRS is that the typical advice given allows for individuality – as cliché as it sounds the operative word in personal finance is personal. Comparative judgment has limited usefulness – for those who think surgery for a ‘pet” is a viable option, your fiscal philosophy has to be elastic or responsive enough to that eventuality – that may mean an extra $500-$1K in the emergency fund, premiums for pet insurance, etc.
Not to be critical here, but that photo makes you look like a poster girl for carpal-tunnel and back/neck problems.
Get a comfortable chair that you can sit with your back straight and your head up looking straight ahead. Where you are looking is where your screen needs to be. Without tipping your head forward. Experiment by placing the laptop (securely) on stacked up books or a cardboard box (stuff with pillows or something so it doesn’t collapse). Your eyes should be roughly level with the center of your screen. The distance forward/back depends on your eyesight. Experiment.
Next you need to place the keyboard so that your arms are hanging down normally from the shoulders, your forearms are extended forward with a straight line through wrists to the knuckles. If you look at your photo your wrists are tilted up AND your fingers extend upward even further. Both are wrong. Your fingers need to drop from the knuckles down in a stress-free manner. Your forearms can be tilted upwards slightly to accomplish this but probably will need support. Do NOT tilt your wrists up – this is carpal-tunnel territory. This position is best achieved using a wrist-rest, which I highly recommend. You might be able to cut up old mousepads and glue them in layers to make temporary wristrests.
Work out these positions before you buy or build anything permanent. Wrist cushions are very personal. I preferred dense foam, but other people like softer foam, and others like hard plastic. Be able to adjust the height and position for when you work too long and get tired and just need a change of position. Just be sure your temporary laptop rest is sturdy and won’t allow it to fall.
I cured my own incipient carpal-tunnel by realizing what was happening and taking charge of my own care. I had seen people with wrist braces and knew what those tweaks of pain meant. Take charge of your own work position, alter it as needed.
Be aware that carpal-tunnel occurs because there is a transverse tendon that goes across the top of your wrist. When you flex your wrist you are pressing the tendons that go to your fingers up against it and causing it/them stress. When it swells it presses against nerves. To avoid this the wrists need to be relaxed and the fingers also need to hang relaxed as you type.
Good luck!! Taking care of yourself is better than going to a doctor.
Excellent post! While I hate to hear that it was brought about by a medical emergency and the loss of a pet, it has been very inspirational.
I would have totally used the medical emergency as license to buy the new desk, Dragon, keyboard, and probably a new chair while I was at it.
Well done for sticking to your financial guns and keeping your priorities well in mind when faced with these circumstances.
I was also raised in a home that saw money (usually a credit card) thrown at problems and am working very hard (HVAC system not working now) to change those patterns without resorting to more debt.
Great job on an inspirational post.
The problems with your wrists can most likely be attributed to the anguish caused by the death of your cat. Do yourself a favour – skip all the expensive remedies people have suggested and hire Dr Sarno’s mind body connection book from your local library.
$800 on cat expenses when your emergency fund is $1,000 might not be the best choice. Yes, I have pets, yes, I like them, but they are animals, not people.
Good luck with your RSI — I hope you can get it straightened out.
Thanks for this great article! My husband and I are in a similar situation. In Nov I reduced my working hours to part time due to increased stress causing myself health issues. Dec comes and we have a $1400 vet bill for our cat that hurt its foot. We used our emergency fund and cut expenses else where. We had a preplanned trip to NYC for a week including New Years, already paid for in cash. We come back and now our dog has a hurt leg and we have another $1000 in vet bills again. We are sitting down tonight to see where we can trim more money from.
Hope your neuro condition improves!
You don’t say what type of debt you have. When I had credit card debt I didn’t keep much of an emergency fund. Now that I’m paying off student loans I keep at least 2 months of living expenses. $1000 is really minimal. I would not keep such a small fund unless I had extremely high-interest debt.
The most important part of this article is the idea of borrowing from yourself. My sister had enough sole and separate money to buy a house. She went to the lawyer and had an agreement for them to borrow the money and pay it back to herself with interest. Surprisingly, she is allowed to declare that interest on her taxes! There are some great things about borrowing from yourself!
On another note….
We have raised two kids.
As a person with a husband who said he would never spend more than $100 on an animal- our puppy had a growth removed last month at the tune of $300. (Vet school nearby) A routine appointment for the two dogs is around $100 for meds. We have a pet fund- $50 a month. If we don’t use it, it will roll over to next year and slowly it may be absorbed into savings. So far, it was all used this year. I don’t borrow for the pets, I went ahead and assumed cost and set up a fund (that my husband did not know about until I pulled out the cash to pay the vet bill:>).
I don’t know anything about RSI, but I love Alexander Technique. There is a book he wrote himself that is not well-written but is full of excellent information and is better than any of the books written by writers about AT (according to my AT teacher in college). I’m sure you could get it at the library.
This is the one by Alexander: http://www.amazon.com/Use-Self-F-M-Alexander/dp/0752843915/ref=sr_1_6?ie=UTF8&qid=1294502835&sr=8-6
And this is another that is pretty decent: http://www.amazon.com/Body-Learning-Introduction-Alexander-Technique/dp/0805042067/ref=sr_1_2?ie=UTF8&qid=1294502835&sr=8-2
(I hope two links don’t get me marked as spam!)
Sierra, you say you “nerve problem that temporarily crippled my hands” and that “The cause is unclear.” Has anyone explored if you are subluxated? Often times nerve problems are caused by subluxation, a misalignment of the spinal vertebrae that can cause interference in the nervous system. If the problem is structural, chiropractic care may be able to work wonders for you. Often times these medical conditions seem to come out of nowhere but can often be the result of every day behaviors. Many people think chiropractors treat back pain and whiplash, and while they do that, their main job it to realign the structure of the spine and correct subluxation. I urge you to please at least get a consultation from a reputable chiropractor. Even if it turns out it’s not the case, it is most certainly worth it to find out if they can help. The cost to see a chiropractor is significantly lower than that of an MRI or other diagnostics that may be done for a “nerve problem.”