Real-Life Example of How Emergency Funds Made a Difference - DM 91
- noemedagatan
- Jun 14, 2024
- 2 min read
A real-life story of using an emergency fund. Hey, it's Jon from Financial MD, welcome to today's Didactic Minute.
I'm going to get real with you. I talk about an emergency fund all the time. I really encourage people to get that going. That's kind of a Step 2 in the Four-Step Resident Roadmap process. It's part of the Safety Net – three to six months of your fixed expenses. How do you do it? That can be another topic for another video. But I'm going to give you a real-life example of it actually being used because some people just don't take me seriously enough that it's important.
So this was about November. My house – not an old house – was built in the 90s which you could say is old – 30 years old now – but the furnace in the house, it's cold. We're in Michigan. The furnace is working; then one day it's not. Now I went down and looked at this furnace and I knew – because I bought this house for my parents – that the furnace had been replaced probably 10 years ago; maybe… maybe 15, but probably somewhere between there. So I went and checked it out. I called my HVAC guy. I have a guy – you should have a guy – and he came by and said, "Well, it's probably this thing that we can probably get some warranty but then you should probably upgrade it, go a little bigger, because it's not big enough for the house," da-da-da-da. So finally, we got down to brass tacks and it was going to be about $6500. Now, not bad. I know furnaces have been more. There's some warranty stuff I got, but that's not cash that I keep just sitting around in my checking account and I'm not going to dip into other things and so I thought, "You know what? This is an emergency," when stuff breaks in the house and we need heat and we need a furnace. And so luckily, I had honestly just finished an emergency fund. I had a big chunk come in for some stuff and some business that we had done and I had enough, and so I was able to use that for an emergency fund. No credit card used; patted myself on the back, told my wife, got some brownie points there, and I actually used my emergency fund. So, that solidified it for me. It always was. Hopefully, that solidifies it for you. Get that going. Start something. Pick $100 a month, $200 a month, whatever the case might be. Find a separate account that you can't log into and see every day. Protect yourself from yourself. Get that emergency fund going.
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It's Jon from Financial MD, we'll see you next time.
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