How our Emergency Fund has saved us from disaster. (A friendly reminder on why you need one)

I’m going to tell you a little bit of a personal story, because it will illustrate the point, and also a little bit to brag because I’m so proud. 😉

– To start, about 1 1/2 years ago I told my husband we had to save up an emergency fund. He didn’t see the point. “We have plenty of credit, why do we need an emergency fund?” I insisted, and went full dictator over our finances until we had a full 6 months worth of living expenses saved up. He was not enthused. Until…

– Almost a year ago, hubby had an acute infection in a tooth, face blew up in 24 hours. Over the next 48 hours, we went through 2 dentists, 1 root canal, 1 stand-alone emergency room, 1 ambulance ride, 1 hospital admission, and 1 tooth extraction and sinus cavity scraping. Total bills without insurance would have been $20k+. We spent the next 9 months going back and forth with insurance until finally they got it right, and we were responsible for a total of around $5500, which we negotiated down to $3500. Paid in full last month.

– 2 months ago I walked away from my job due to severe anxiety attacks and started therapy. So $30k/yr gone, and $500/mo added to our expenses. I’m now about a week away from hunting for a job in my new chosen profession (MUCH less stressful than the previous one). I should be back at around $30k/yr.

– 1 month ago hubby’s job started a promotion that has cost him about half his typical commission. So, for the past month, we’ve been bringing in 1/3 of what we were used to. And this promotion is set to last 2 more months.

– About a month before I quit, our fully paid-off car broke down, and fixing it would have cost more than it was worth. We decided for the first time to actually have a car payment, which between the payment and insurance, costs us about $325/mo more than our old car.

Having dealt with all of this going on the past three months, how are we doing? Just fine. Still no debt other than the car payment. Still have about 4 months worth of living expenses tucked away. And we can pretty reasonably expect that I will be employed again within a month. All of this happening all at once could have destroyed us. But it didn’t. Because we had an emergency fund, and we live below our means. I can’t imagine what my anxiety would be like if we hadn’t been prepared.

Emergency funds. They’re super important, and you’ll never regret having set it up. Don’t wait.

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