Technology is great. It makes our lives more convenient, it can increase our efficiency or provide distractions, and it has broadened our access to information. But it’s also made living a whole lot more expensive. In today’s world, when something goes wrong in our lives, it’s probably going to be expensive to fix. That’s why it’s important to have an emergency savings account and why it’s vital to staying out of debt.
You could lose your job or get the urge to change jobs. You just never know, so don’t be dumb.
Now I’ve heard tell that some people don’t feel the need for emergency savings because they make so much money they could easily cover an unexpected expense. And what I have to say to those people is “don’t be a fool.” Then I would slap them and take their credit cards away. Then I would show them some fancy charts and explain the error of their ways. Then they would repent. In short, what I have to say to those people is, “You never know what’s going to happen.” You could lose your job or get the urge to change jobs. You just never know, so don’t be dumb.
Plan for the Unexpected
Since we’ve been married, my husband and I have always had an emergency savings, and we’ve had to tap into it several times. In fact, for awhile, it felt like every time we got the account back up to the minimum amount we like to keep in there, something terrible would happen. Here’s a list of things that went awry in our first 4 years of marriage.
- Our shower leaked. Paid a plumber to diagnose the issue and fix it.
- Multiple car problems (because that’s life).
- Unexpected tax bill because of tuition grants to get our Master’s degrees. No joke, that cost us $1500. Yay education.
- Job transition.
- Cost of selling our house (painting, minor repairs, appeasing the buyers).
- Cost of moving to a new state – registering our cars, paying the security and pet deposit for our rental, and paying for a moving truck.
These “unexpected” costs are really just part of life.
Some of these weren’t emergencies, but our emergency fund let us pass through these transitions and unexpected events without too much stress. I listed all of them out for you so that you could see how normal most of them are. These “unexpected” costs are really just part of life. But because we strove to consistently keep money in our “emergency” savings account, we didn’t have to defer the costs to a credit card. It’s the only reason we’ve been successful in staying out of additional debt (we still have student debt and a car payment).
Staying out of debt doesn’t require you to be rich
I’m not telling you all this to be like “oh look at us, we’re so great because we don’t have credit card debt.” I’m telling you all this because I want you to know that staying out of debt isn’t a distant dream that’s only attainable by the rich and wealthy. You can plan for life and live with a lot less financial stress.
Having an emergency savings account allows you more freedom to do what you want.
But we don’t listen because we’re Millennials and we just want to live our lives and be free spirits. We don’t plan for the future because that’s boring (or because it’s easier to make excuses). Listen, the future is a lot more fun when you’re not stressing about that massive car repair or medical bill. Having an emergency savings account allows you more freedom to do what you want. You have money to support yourself through a job transition. You can plan on a vacation knowing you’ll still have money to take care of your house if it’s destroyed in a terrible storm while you’re gone. Emergency fund = Peace of mind.
And maybe you’re saying “well you had a stable job so you had the luxury of being able to save money.” I see people give Financial Panther a hard time about this constantly…just because he’s a lawyer so that made his journey to paying off debt SO MUCH easier and psh, “If I was a hot shot lawyer I’d TOTALLY pay off my debt in like two seconds.” But really? You’re telling me that you don’t have any extra money that could go towards debt instead of movies, eating out, and drinks with friends? Sure, there’s people that are definitely not in stable or decent-paying jobs who can’t save, but I think those people are much fewer and farther between than they like to make us think. It’s more about how much self-control you have than how much money you have.
Anyway, the secret to staying out of debt is having a solid emergency fund to back you up. Because life happens.