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Emergency Fund FAIL!

I was hoping to write a post in the near future on how my next goal was to establish a real emergency fund in order to have cash set aside for car repairs, home appliance repairs, or medical emergencies.  Having six kids means lots of potential emergencies so it would really pay to be prepared.  Plus with the credit crunch, it really isn’t a good idea to depend on credit for an emergency fund.

Of course, I bet you can see exactly what is coming.  It is just like any overworked plot on television.  The air conditioning stopped working yesterday morning.  I woke up, and it seemed awfully hot in the house.  I checked the thermostat.  It was reading 83 degrees at 5 am.  Not good!  The air coming out of the vent was lukewarm and my heart sank.  I just knew what the writing on the wall said.  It said, “Your air conditioner is 10 years old.  Major appliances will only last about ten years.  You will need a new one.  (Evil laugh).”

Of course, the repairman that came out could read the same writing and suggested that I could get a new compressor for $2500 or a new unit for $4050.  Well, it only made sense to spend a few extra dollars and replace the unit that will need replacing anyway.  Why spend $2500 this summer only to need a new one in the next year or two because something else goes?

While I don’t have an emergency fund per se, I do like to keep a month ahead on my fixed bill checking account.  I do this since I only get paid once per month on the 5th and have most bills due in the early part of the month.  Without the cushion, the due dates and time it takes for funds to clear can be cutting it dangerously close.  Well, the money has been transferred, and we will be getting a new air conditioner on Friday right as the weather starts to heat up a little more.  In the meantime, fans and the basement are OK.  Of course for me, being at work is COOL (literally)!

Despite this temporary and ill-timed set back, I still need to put together a true emergency fund.  Initially, I was thinking about $5000 which seems just about right for a major household appliance like the furnace.  I also know that having a transmission rebuilt on a minivan is about $2200, but I have already done that.

I have been reading lots of posts about emergency funds and Dave Ramsey’s $1000 start.  While that might be good for a baby step, I really think it needs to be more.  Squirrelers makes a great case for a bigger emergency fund, and I would have to wholeheartedly agree given my recent experience.  So rather than be able to share that I accomplished my goal of creating an emergency fund, I will have to lament my lack thereof and save that post for another day.  You can bet I will be working on it, though.

Any comments or sympathy would be appreciated (wimper).

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18 comments - What do you think?  Posted by Cash Flow Mantra - June 29, 2011 at 12:48 pm

Categories: Spending, Saving   Tags: , , ,

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