Home > Restarting the Emergency Fund

Restarting the Emergency Fund

February 19th, 2010 at 07:24 am

Okay, so yes, I'm really still back. It's just that after the last time I posted we promptly all got a very nasty sickness that ran through all of us but managed to do it one at a time, so once I was done caring for one child and got him well, the next child went down. And then I got her well, and I went down. I'm finally on my way back up and my daughter went back down again, this time with an ear infection. She's got antibiotics now so hopefully we'll see the back door of all this soon. All this while trying to homeschool.

Anyway, one of the things that has really fallen by the wayside with me is having an emergency fund. With the last raise my husband got things got so much easier for us that I pretty much stopped worrying about having an emergency fund. I thought, hey, we can absorb it if something happens. And yeah, for the most part we can.

Only after our last vacation, which was in October, and was paid for in cash, we were pretty much running low on reserves. And that was the time that one of our car tires exploded. We're still not sure why but that puppy was shredded in ways the tire guy claimed he'd never seen before. Fortunately it happened in a very safe place and I have AAA so everything turned out fine.

Except one of the lovely, lovely things I never knew about is that if you have a car with all wheel drive and you have to replace the whole tire, not just repair it, that means you have to replace all four tires even if they're only a year and a half old. It doesn't matter how good your remaining tires are. They all have to have the same level of tread wear for all wheel drive to work right. The tire places won't even sell you just one in that case. Which, yeah, makes sense, but totally bites, because the $150 you expected to pay to replace the tire, suddenly becomes $600 and oh, great, no emergency fund because we can absorb it.

Um...yeah. Right before Christmas. Right after vacation. Well, we absorbed it all right but it wasn't much fun. So I knew it was time to get my act together and reestablish an emergency fund.

So last month I started with my safety net. My safety net is always an amount that is kept in a locally accessible credit union that I can drive to within a moment's notice and have cash in hand that day. It was a tighter month because my husband had had an extra week off over the holidays unpaid because they shut down to a skeleton crew. So I was only able to squeeze out $300 with which to fund the saftey net. It's not near what I'd like it to be, which is $1000, but still, a good start.

This month I've sent $500 to the actual emergency fund, which brings it to a whopping $520.26. This money I keep in an online bank where it's out of easy reach, but I can still get it transferred in 3 days time. The bank no longer generates much interest, but this is more about available money than earning with it so I don't mind too much. I haven't delved back into the "which online bank pays you the most stuff" yet. I've been sick and busy and just haven't got around to it.

I am hoping to contribute $500 a month directly to the emergency fund and $100 a month to the safety net. I want to eventually have about $15,000 in the emergency fund at which point I'll probably want a better interest bearing account.

I also am going to start up collecting all of my coins and one dollar bills again to add in to the EF. This amount will be above the $500. I've still got my trusty old salad dressing bottle for the dollars and I have a talking TARDIS money bank (yes, I can be a silly fangirl at times, but it was a Christmas present) for the coins. It's silly, but I like it and it works, and I love the way the little light flashes and it make the dematerialization noise. Plus, it holds as much in coins as the jar ever did.

Anyway, that is my current plan to rebuild things again. Hopefully I'll be able to stick to it.

7 Responses to “Restarting the Emergency Fund”

  1. fern Says:

    Wow, a voice from the past...Welcome back! Sorry to hear about the tire fiasco.

  2. creditcardfree Says:

    Good luck getting that emergency fund where it needs to be. You have a great plan it sounds like.

  3. Analise Says:

    It's nice to see you back. Your savings plan looks good.

    I had no idea about AWD tires. We have an AWD, so it's good to know.

  4. Ima saver Says:

    Welcome back.

  5. homebody Says:

    Hi! Nice to see you again.

  6. LuckyRobin Says:

    Thanks, everyone.

    Analise--Yeah, on the tires, it was a big surprise. I've never had AWD before we bought this car and this was the first time I had to deal with it. It's good to know, because I will earmark $600 to keep in a car expenses fund just for that in the future.

  7. baselle Says:

    A TARDIS money bank? That's awesome. I thought of you while we were working our way through 2 seasons of Torchwood. Netflix - with a view/mail cycle 2X/week it can really pay off.

    I also gave DH a copy of My Bread written by the same baker who came up with the NYT no-knead bread recipe. I bring it up because there were several no-knead pizza dough recipes. We ate no-knead pizza during the Super Bowl. Fun, but you really have to plan ahead for that one.

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