This is our Sunday series where we all respond to reader questions. If you want to submit a question, please go to this post.
Question of the Week
|How are you going to handle difficulties and emergencies now that you are in debt reduction mode and will no longer be relying on credit cards and loans? posted by Hot Sauce|
| When my husband started with his medical problems they were running all kinds of tests to try and figure out what was wrong. We had gone to Houston for a major test and before we could sign in they wanted $1,800.00. I completely panicked and all we could do was put it on a credit card. His health problems were the main reason I shelved my business and went back to work for someone else. We just could not afford all the medical bills plus the debt we had accrued. I went back to work full time, worked my business on the side as much as possible (monogramming) and worked a second job in the evening at my parents business. Because of this we were able to put some money into an emergency savings account while still paying down our debt. That was a hard time on our family because I was never available for my girls since I was always working. While it was hard, it was so worth it because we now have a little set aside for emergencies. I am now only working at my day job and doing a little bit of my business on the side. But, if we needed it I would do it all again because I don’t ever want that feeling again of knowing we have to pay for something that concerns our health and the only option is to put ourselves more into debt. |
|That is a real toughie for me. You see we already live paycheck to paycheck. This wasn’t always the case… Before I quit my job, to be home with my family, I was making around $4.5k a month and we did have a good savings. But little by little, the savings got eaten up. But I do want to build that emergency fund up, because my wife and I have terrible luck. After the end of this month, I will have a clearer picture of where my money is going and where I can budget everything. After that, my first priority is to start that emergency fund. I haven’t really relied on credit cards for a while now (another story), except for the one store credit card. That is for a clothing store of my wife’s. She has lost a lot of weight since we have been married. And I know that she will need clothes for the summer. Hell everyone will need clothes, except for me hopefully. The kid’s I try to buy next year’s clothes after the season ended on clearance. But it is getting harder to find these clothes. But yard sell season is coming and I am anxiously waiting to find what kind of deals and steals I can get this year.You ever notice that when a real emergency comes up, you somehow find the money? Whether it is from robbing Peter to pay Paul, or selling stuff? Somehow you always do, well I hate the fact this happens all the time with us. So hopefully I won’t have to once I sit down and look at where all my money is being spent|
|I am on the fence about an emergency fund. I know I should have one, especially with four kids. However, I also know that I am really bad about dipping in when I shouldn’t. I did well last fall and saved $50 per month in an account that I cannot access without going to the bank – no debit card, no online transfer, etc. That worked. I put the money in when I deposited a check and didn’t think about it. In addition, I am leaving no cash I can get too, everything is going to bills or to debt. We are living very lean in trying to do this. But then an emergency struck, my son broke his hand, and I had to rush him to an Urgent Care after bank hours. I had no access to money, none! Thank God, literally that his dad lives 30 minutes away and met me halfway to bring me the money to get him seen.So the answer is, I have no idea. I am not a panicky person. I have a good support system I could call if needed. And I carry life insurance in case of the worst. I think I would probably fly by the seat of my pants and trust God, karma and my great family and friends would help me for now. But I am considering starting my inaccessible emergency fund again, maybe. Would love to hear the communities thoughts on it.|
|I think, for me, the biggest change will be a psychological shift. When we experienced our most recent emergency (with my husband’s health crisis – discussed in this post), my immediate reaction was to whip out the credit cards and reserve cash for only the essentials (e.g., rent, utility payments, etc.) In the end, we ended up accruing more debt that was totally 100% avoidable because, in fact, we had an emergency fund that could get us through at least 2.5-3 months (or longer if we really cut down to bare essentials. For some reason the credit cards provided a sense of security. But that’s exactly what an emergency fund is supposed to be for….emergencies!!! I think by shifting my mindset to not viewing CCs as a “safety net” and instead viewing them as the devil (a little dramatic, but you get the idea), and relying on my emergency fund in case of emergency we should be okay. Restocking a month or two of our emergency fund is a much faster/easier process than paying down our monstrous debt that is accumulating daily interest!|