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.

Sierra, typing at her renovated desk

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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LifeAndMyFinances
LifeAndMyFinances
9 years ago

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.

retirebyforty
retirebyforty
9 years ago

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.

everyday tips
everyday tips
9 years ago

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… Read more »

SF_UK
SF_UK
9 years ago

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… Read more »

Eboo
Eboo
9 years ago

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.

Elizabeth
Elizabeth
9 years ago

Hope your health improves soon! I know what it’s like to have to adjust financial goals due to health. Best wishes.

David Hunter
David Hunter
9 years ago

A great example of why it’s important to have an emergency fund, no matter how big or small.

Brian
Brian
9 years ago

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… Read more »

lostAnnfound
lostAnnfound
9 years ago

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… Read more »

Michiel
Michiel
9 years ago

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.

Nicole
Nicole
9 years ago

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.

Elizabeth Finney
Elizabeth Finney
9 years ago

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!

Jonathan
Jonathan
9 years ago

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.

Jason
Jason
9 years ago

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… Read more »

dotCOMreport
dotCOMreport
9 years ago

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.

David Hunter
David Hunter
9 years ago

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.

Qwerty and Mr. Qwerty
Qwerty and Mr. Qwerty
9 years ago

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… Read more »

Me
Me
9 years ago

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… Read more »

Katy @ The Non-Consumer Advocate
Katy @ The Non-Consumer Advocate
9 years ago

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”

smirktastic
smirktastic
9 years ago

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.

cc
cc
9 years ago

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… Read more »

Alison Wiley
Alison Wiley
9 years ago

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!

Janice
Janice
9 years ago

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… Read more »

Jen
Jen
9 years ago

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… Read more »

David S
David S
9 years ago

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.

Carla
Carla
9 years ago

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.

Carla
Carla
9 years ago

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.

Kim
Kim
9 years ago

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.

melissa
melissa
9 years ago

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… Read more »

Marly
Marly
9 years ago

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… Read more »

Stephanie F
Stephanie F
9 years ago

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… Read more »

Lyn
Lyn
9 years ago

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.

PB
PB
9 years ago

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… Read more »

Jeremy
Jeremy
9 years ago

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!

Ely
Ely
9 years ago

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… Read more »

Walter
Walter
9 years ago

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… Read more »

the other Tammy
the other Tammy
9 years ago

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… Read more »

Eileen
Eileen
9 years ago

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.

Becky
Becky
9 years ago

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… Read more »

C Spicer
C Spicer
9 years ago

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… Read more »

Nicole
Nicole
9 years ago

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.

Tyler Karaszewski
Tyler Karaszewski
9 years ago

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:… Read more »

Ely
Ely
9 years ago

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.

Dee
Dee
9 years ago

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… Read more »

Christy Johnson
Christy Johnson
9 years ago

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. 🙁

Nicole
Nicole
9 years ago

@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… Read more »

Rita
Rita
9 years ago

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… Read more »

honeybee
honeybee
9 years ago

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… Read more »

MutantSuperModel
MutantSuperModel
9 years ago

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… Read more »

Kevin M
Kevin M
9 years ago

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.

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