Wednesday, 12 July 2017

Why you Budget for your Emergency Fund

Your car just broke down. You know you’re in for a big bill. How do you even start to budget for that?

The answer is, you shouldn’t have to.

My second post on this blog was all about how you should be putting money away in an emergency fund. Today I’m going to show you why.

Happy little Fiat, right?

It all started about six weeks ago. My car (the Fiat) was having trouble starting. This went on for a couple days and I was starting to get worried. Then, just as suddenly as it began, it stopped. Fast forward to about a week ago and the car was dead on its wheels. We tried jump-starting it – nothing. We tried replacing the battery – nothing. I know enough about cars to usually have a rough idea of what’s going on (my suspicions were alternator or starter), but there was no way I was going to be able to get in there and fix it. I managed to eke it to life just long enough to get it up to my mechanic and he told me what I had already guessed – my starter had gone splat. Annoying, but fixable and not too expensive. So one day and a hunk of change later, my happy little car was back and ready to roll.

Except it wasn’t.

On Sunday, Husband and I had decided that we were going to go down to a local cemetery for a walk and spend some time taking pictures. We got about 100m from the house when suddenly, the car stopped shifting. The linkage had separated. I managed to get under the hood and slide the pieces back together but there was no way we weren’t getting away without another trip to the mechanic. Another day without my car and a larger chunk of cash later, I had the Fiat back, much healthier and in its rightful place in the driveway.

The linkage that failed (failed component is top right)
 It didn’t come cheap, though.

Here’s the breakdown for all of the repairs:
  • Battery: $163 with tax ($20 rebate to come at a later time)
  • Starter: $474 with tax (Part and installation)
  • Linkage Cables: $595 with tax (Part and installation)
Total: $1232

If Husband and I didn’t have an emergency fund, we would be in trouble right now. Luckily, we follow our rules and put 10 per cent of all our combined earnings into an emergency fund. It hurts taking the money out of the accounts and paying that bill – but it would hurt a lot more if we couldn’t.


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