Category Archives: Personal Finance

Money in the Bank

Last week I had a conversation with a coworker about how many of my other coworkers eat out every lunch. He said that it was something that he, as a husband and a father, just couldn’t afford to do. I replied that I didn’t feel I could afford it either, even with only having myself to support.

His response, “So you have money in the bank.”

I’ve never thought about it in those terms, but that’s exactly what not eating out meals has afforded me. When I was younger, I used to be just like my coworkers, eating out most meals. Sure, they weren’t anything fancy, but $5-15 each meal adds up very fast. Not to mention the types of food I was eating added to the 112 pounds that I’ve been diligently working to get back off me these last few months.

So instead of all those delicious, convenient meals, I have “money in the bank”. I am still eating pretty tasty fare that is as convenient as sticking today’s previously-homemade meal in the microwave for two minutes.

This conversation made me realize I needed to re-calculate my net worth. Sure enough, for the first time in my adult life, my net worth is larger than my annual income:

Ronnica's Net Worth

It’s excited to see that number grow as I continue to squirrel away money towards a future home purchase and even more long-term, for retirement. I still feel like I’m playing catch-up a bit from the time I spent in my 20s spending every dollar I made, but slowly the numbers are starting to work in my favor. That’s only going to continue to be the case as my money starts working for me, too. As Chris Hogan says, “Interest paid is a penalty; interest earned is a reward.”

Ronnica’s 101 Tips for Living on Less and Loving it

The idea for this blog is taken directly from Your Money or Your Life. In the updated version, Vicki Robin removed the tips section she had previously and advised writing your own…so I am.

Here are my tips for living on less and loving it:

Attitude
1. Don’t compare yourself to others. You don’t know how much debt they had to go into to buy that house/car/wardrobe/vacation.
2. Focus on being thankful for what you have instead of what you do not have.
3. Open your eyes to those in other situations than you are (at home and abroad). Much of what we think of as “needs” is culturally influenced.
4. Be more concerned about what you think about yourself than what others think about you.
5. Make friends who are like-minded and can inspire and encourage you.
6. Seek advice from those who are better than you in the areas you want to improve.
7. Avoid ads whenever possible.
8. Avoid visiting places where you will be tempted to shop without forethought.
9. When you’re tempted to splurge, remind yourself of your long-term goals.
10. Unfollow Facebook friends whom you are tempted to be envious of.

Groceries/food 
11. Buy fruit when in season and on sale and freeze or can it for later for use throughout the year.
12. Freeze unused yogurt before it goes bad and stick it in smoothies.
13. Freeze unused milk before it goes back and use it for baking.
14. Make your own dressing…better for you, and you make it for your own tastes.
15. Make your own spice mixes (ranch packet, Italian seasoning, chili powder, etc.).
16. Make sweets from scratch. Cheaper, and you’ll eat them less often.
17. Make your own ice, saving in Ziploc bags if you need to take it with you.
18. Make your own pizza crust and freeze it in appropriate-sized dough balls (wrapped in saran wrap placed in a Ziploc bag).
19. Eat more like a vegetarian.
20. Replace ground beef with black beans in your favorite casseroles.
21. Bake a week’s worth of goods in one day.
22. Know where to buy what to get the most value.
23. Freeze any unused bread before it goes bad, then use it to make your own croutons.
24. Save eating out for special occasions…
25. But be sure to tip generously when you do.

Health/beauty
26. Find beauty products that you can use for more than one purpose.
27. Wear less makeup.
28. Wear makeup less.
29. Cut your own hair.
30. Spend less time on your outward beauty and more time on your inward beauty.

Utilities
31. Turn off your electronics when you leave your house. I have my TV, DVD player and modem on a power strip that I can easily flip off when I leave the house.
32. Use a window fan to cool your bedroom instead of A/C.
33. Research the cheapest cell plan that meets your needs (StraightTalk has been great for me).
34. Pay for your cell phone by the year to save money (I pay for 11 months and get the 12th free).
35. Buy a highly-rated phone and keep it for several years.
36. Save waste water (like from unfinished cups or pasta water) and use to water your garden.

Housekeeping
37. Make your own laundry detergent.
38. …and your own dishwasher detergent.
39. Hang up your clothes to dry after washing, even if you have to hang a line inside.
40. Clean your kitchen with vinegar and water.
41. Clean your toilet with vinegar and baking soda.
42. Use handkerchiefs instead of tissues.

Clothes
43. Buy clothes that you are comfortable and you look good in. For me, that’s skirts.
44. Hang up clothes at the end of the day where they can breathe. If they don’t have visible dirt or stink by morning, hang them back in your closet.
45. Simplify your wardrobe so that everything matches just 1 or 2 pairs of shoes.
46. Pare down your underwear down to a week’s worth, and wash by hand between machine washes if needed.
47. When buying new tops, try getting 3/4 length sleeves, as they’re wearable almost year-round.

Garden
drying oregano48. Take advantage of any sunny area to plant a container garden.
49. Starting with easy veggies that are your favorites.
50. Grow your own herbs. Much cheaper and tastier than what you can get at the store.
51. Make friends with people who grow different things in their garden than you do and trade.
52. Companion plant in a way to attract the right kinds of bugs (ex: nasturtium with tomatoes).
53. Invest a little more in non-hybrid seeds, and save the seeds the plants produce for the next year.
54. Add cleaned egg shells to your tomato soil to fight blossom end rot.
55. Fight powdery mildew with watered-down milk.

Transportation
56. Be generous in the space you give between you and the driver in front of you. Saves stress as well as gas/brakes.
57. Turn off your car’s A/C if you are driving under 45 MPH.
58. Use public transportation when traveling to high travel areas (like downtown). Cheaper than parking and less stressful.
59. Instead of buying a car with payments, save each month what you would spend on a car payment and buy your next car with cash.
60. When shopping for a car, shop according to your needs, not what others will think or how the car makes you feel.
61. Buy transit passes through work, which allows you to buy them with pre-tax money.

Shopping
62. Before buying anything, find out if someone has something that you can borrow to meet that need, or if you can repurpose something else.
63. Buy to last: it’s okay to spend a little more in the short term to get something that will last your lifetime.
64. Don’t browse catalogs or websites.
65. Research electronics so you get exactly what meets your needs.
66. Focus on buying items that can meet more than one need.
67. Comparison shop online before hitting up the store.
68. Avoid the mall, unless you have a specific purpose for being there.
69. Use reusable bags. (Store in the car so you don’t forget.)
70. Save your splurging for the library.

Travel
71. Pack your own snacks and entertainment. You’ll spend half as much at a drug store than at the airport for the same items.
72. Bring an empty water bottle through security and fill it up at a water fountain on the other side.
73. Download ebooks from your library to your phone, tablet or e-reader.
74. If traveling over holidays, research flights on the holidays themselves, as they are usually significantly cheaper.
75. Save regularly for your travel goals, and don’t let less significant trips get in the way of budgeting for the ones you’ve always wanted to take.
76. Pack as few pants/skirts and shoes as is reasonable.

Moving 

77. Before deciding to move, come up with a budget and save up so that you’re not moving a credit card bill, too.
78. Find someone who recently moved and ask them for their boxes when they are finished.
79. Price the various moving options and determine what is the best value for you, money and time-wise.
80. Don’t forget to budget for all the little things you always seem to need when you move to a new place: trashcan, rugs, curtains, etc…
81. But also think through what you can reasonably do without.
82. If moving long distance, consider which possessions it may be reasonable to get rid of and replace when you get to your new home.
83. After you move, don’t visit any local fast food places, so you never get into that habit.

Hobby/Entertainment
colorado trail fall colors84. Find hobbies that costs no money. Mine are reading and hiking.
85. Use the library liberally to get as many as your entertainment selections as bbpossible.
86. Instead of going to the movies, make note of movies you want to see, to watch them on Netflix or borrow from the library later.
87. Exercise for free: outdoors or using frugally-acquired equipment at home.
88. Be a tourist in your own city, seeing (free or cheap!) sights you’ve never seen.
89. Cancel your Netflix or Hulu subscriptions regularly, saving up what you want to see for single 30-day windows, paying just for one month.
90. Use Pandora or Spotify instead of buying your own music.
91. When meeting up with friends, do activities that are free. Eat in together (even if it’s leftovers!) instead of out.

Holidays/Giving
92. Don’t give obligation gifts. Give according to your heart.
93. Buy a pack of blank cards, instead of holiday-specific cards. Write your own message.
94. Be intentional in your giving to charities, researching the organizations that you are giving to.
95. Pare down your holiday decorations to your absolute favorites.
96. Wrap gifts in usable or reusable wrappings (such as a reusable grocery bag in a fun color).

Time Management
97. Order your to-do list from most important to least, then work from the top.
98. Review your life plan regularly so that your to-do list aligns with it.
99. Make shopping lists on your phone (I use Evernote), saving paper and making it harder to leave behind.
100. Run your errands in one day, mapping your route to save gas and time.
101. If something has been on your to-do list for a few weeks, either do it or mark it off undone.

Ronnica’s 2016 Goal Updates

Now that we’re half way through 2016 (!), it’s time to look back on the goals I set for myself at the beginning of the year. To be honest, I haven’t really thought about them too often, as my life plan has taken over my focus, so I was a little worried.

In January, I set 2 goals as well as spending goals. My first goal was to spend 30 minutes each day to cleaning/straightening my apartment. I’ve been pretty successful with this goal, and my apartment shows it. Accompanied by getting rid of things and organizing, my apartment looks better than it ever has. I still have work that I want to do, but I feel much more comfortable at home.

My second goal was to do my Bible reading first thing in the morning. I still spend too much time on my phone (usually 15 minutes) before I get to it, but I am regularly getting to it. I would like to keep working on keeping the phone down first thing in the morning.

As for my spending goals, here’s how I’ve done through May (haven’t calculated for June yet):

Groceries
2016 goal: $1,820, 2015 actual: $2,026.04
2016 YTD: $888.75

I’m currently on track to be a bit higher than last year, but as I’ve radically changed what I’m eating, that makes sense. I think this will balance out a little lower, probably on track to be the same as last year’s spending.

Travel
2016 goal: $1,400, 2015 actual: $743.35
2016 YTD: $847.35

I’m currently above my goal, but as my two plane trips were in the first half of the year, I’m really on try.

Hobby
2016 goal: $260, 2015 actual: $625.93
2016 YTD: $24.99

Well below goal, yay! I am saving up right now for a backpacking pack, but will probably wait until next year to get it as I’d like to fit it to my new body, not my in-between one.

2016 gardenGarden
2016 goal: $75, 2015 actual: $319.60
2016 YTD: $68.18

This has taken a lot of self-control, but I did it! My gardening expenses are probably done for the year.

Eating Out
2016 goal: $200, 2015 actual: $281.98
2016 YTD: $37.09

I’ve eaten out twice this year (while not traveling). I was already not eating out a lot before, but making my own food from scratch goes a long way to not wanting to eat out.

Gifts
2016 goal: $120, 2015 actual $179.61
2016 YTD: $62.94

I’m over my goal, and will probably end over my goal by the end of the year, but we’ll see.

Clothes
2016 goal: $20, 2015 actual: $60.86
2016 YTD $4.30

Doing great so far, but I have a feeling I’m going to need to spend more than $20 this year. I do plan on buying my newer wardrobe as cheaply as possible, getting by with as little as possible and buying most of it at thrift stores.

Everydollar.com Review

everydollar appIn the last month, I’ve gotten hooked on listening to Dave Ramsey again (this time in podcast form). I’ve  found his Total Money Makeover to be instrumental in my early forays into saving.

One thing that Ramsey’s team has done is create a free website and iPhone app to help people budget. His budgeting philosophy which I’ve followed for years is to give every dollar a name: you decide where each dollar will be used before you receive it. This website is aptly named EveryDollar.com.

I have been able to successfully create these “every dollar” budgets in Google Sheets. Still, I thought it would be interesting to check out the Every Dollar app to see if it would be more useful.

The first thing that struck me when I logged in to the site for the first time was how pretty it was. I can create graphs in Google Sheets (and sometimes do), but they would never be as pretty, easy or interactive as what you can see on everydollar.com. I just wish that you had graphs to compare month to month (though to be fair, this is my first month using it, so there may be some features that have not yet been unlocked for meeverydollar).

Another helpful feature is that you can create “funds.” I use these for my Freedom categories (like saving for my bi-annual insurance bill) and my various saving accounts. It did confuse me at first, but I quickly realized that I did not need to record actually putting money into these funds, just the expenses out of them. This can be a bit confusing if you’re like me, and fund them throughout the month as the money comes in, not at one time.

In addition to the budgeting features, the website tracks your progress through the baby steps. I’m on baby step 3b, which isn’t on there, but it would be really exciting to see progress through baby steps 1-3.

The biggest down-side is that because of the link to the baby steps, you can’t remove “debt” as a category. I worked hard to remove debt from my life…I don’t want it in my budget.

Still, that’s a minor impediment to a very slick and useful site. If you’re new to budgeting or just want to try something new, I’d definitely recommend checking it out. The beginning of a new month is the perfect time to do so.

I probably will continue to use my Google Sheets, if only to keep track where each paycheck is going, and not just where my money is going for the month as a whole.

Amanda’s Buy Little Month Wrap-Up, January 2016

unnamed (13)January was “Buy Little Month” in our house.  Ronnica sang the praises of intentionally minimizing purchases, so I figured…why not try it?

We did not keep records as meticulously as she did, instead opting to track expenses as we would ordinarily.  Rather, our thought processes were what we took note of more than anything.  “Is this a need or a want?” is something that crossed my mind whenever potential purchases came up.  (I think this is how Riley thinks on a regular basis, Buy Little Month or not, so this month really benefited me more than anyone in that regard!)

That said, I wasn’t terribly surprised to find that not much changed in how things went–we didn’t save a great deal of money (although if one considers what has been saved via the new grocery shopping method alone, we did pocket an extra couple hundred dollars).  It turns out, one of our financial strengths is that we tend to be pretty intentional and thoughtful when it comes to purchases.

What I did appreciate about our Buy Little Month exercise was the fact that it was good to refocus on our financial goals at the beginning of the new year.  I don’t know that this is something we will actually sign on to do again, but making sure we continue to stay on the same page as a couple is always a good practice.

Be sure to come back on Thursday to read about Ronnica’s Buy Little Month experience!

Before I Buy a House

house on a hillLast year I made a big deal of getting debt free. Paying off my student loans was one of the biggest financial achievements of my life.

My next financial goal is to save up 6 months of expenses as emergency savings. I only have 4 months currently, but it won’t take me much longer to save up the last 2 months of expenses. Once I have my emergency savings where I want it, I will be formally working towards homeownership, something I wish to obtain by the time I’m 40 (within the next 7 years).

A couple of jobs ago I did some housing counseling. This was during the housing market crash and was eye-opening. I couldn’t tell you how many people I met with that were entirely upside down in their house. On top of that, most of them also had thousands of dollars of credit card and other debts and were often unemployed or underemployed.

That experience makes me very cautious about buying a house. It doesn’t scare me off entirely, but I am aiming to have a 20% downpayment. I can’t protect myself from all financial uncertainty, but I can wisely choose to make preparations now that will put me in the best possible place when adversity happens.

In addtion to a sizable downpayment, I want to have two other funds in place before buying a home. The first is I am calling my “Big Bad Wolf” fund.

My “Big Bad Wolf” fund will be a separate emergency savings account (my bank allows me to create up to 25 different savings accounts, and name them)  with the intent to cover expenses like a new hot water heater or roof. These types of expenses will come, but it’s just a matter of when. (This is essentially an extension of my freedom fund.) I’ve set a seed amount for this fund to be $5,000, with the intent of continually paying into it monthly so it stays funded at this level.

Finally, (and this is the fun one!) I want to have a house upgrade fund. This will be the money that I can use for planned upgrades. Because I know that whatever house I will get will not fully meet my wishes, I want to start out with $1,000 in this fund. I imagine most of that will be going into the garden and some new furnishings. This fund can be depleted, but I’ll allow myself to put money in it each money to continue to make the improvements that I would like. Once I have my place, I’ll estimate the types of upgrades that I would like to do and on what time schedule and balance that against my desire to have my mortgage paid off in 15 years or less.

Will I have all this money in hand when I make my house purchase? Probably not. These are personal goals, not requirements. When I have some of it in hand, I will start to look for mortgage assistance programs that I may qualify for. The market itself will also dictate when I may buy, as right now I’m paying in rent about the same amount as I would pay for a mortgage for a house twice the size of my apartment.

How are you working towards your long-term goals?

Photo by Kevin Saff

2016 Spending Goals

I’m an obsessive budgeter. I know exactly where each dollar should go, planning months ahead.

But until a few months ago, I didn’t pay a lot of attention to where my money actually went. If I went over in a category, I would find money to make up for it in another, which helps to cover up overspending.

So I’ve decided to use the best information I have to reconstruct what I spent in each category each month. In 2015, I spent $19,203.52, not include debt payoff, savings or giving.

Looking over my numbers, I’ve decided to set goals for several categories for 2016 to try to lower my spending from 2015 levels. While I don’t believe my 2015 spending was necessarily too high, I want to fight to keep it in control as I work towards my longer term financial goals.

Important note: I have not changed what I’m budgeting in any category. My budget still reflects what I believe I may spend each month, so will necessarily be higher than the numbers listed below for my goals. Any difference between actual  and budgeted spending will go towards savings (80%) and retirement (20%).

There are a few categories that I will not be setting goals in. This is what I spent in these categories in 2015:

Rent $10,903
Utilities $1,356.98
Insurance $765.34
Gas $750.57
Car (repair/registration) $589.75
Cell phone $548.22

Now for the categories that I am setting goals in:

Groceries
2015 actual: $2,026.04
2016 goal: $1,820

I’m actually pretty happy about this number, as it works out to just under $39 a week. Still, without Diet Dr Pepper and hopefully even less food waste, I should be able to trim it down even more. My goal reflects $35/week.

Ronnica on mountaintop
Views like this make traveling worthwhile.

Travel
2015 actual: $743.35
2016 goal: $1,400

Yes, this goal is going up! This is an estimation of what the trips that I hope to take in 2016 will cost. I already have some of it saved up.

Hobby
2015 actual: $625.93
2016 goal: $260

I spent a lot on outdoor gear this year as I have started to settle into being a Coloradan. I don’t have as many of those types of purchases planned for 2016, though I do hope to go to a few events.

Garden/homesteading fund
2015 actual: $319.60
2016 goal: $75

This is incredibly high, as I settled in to gardening on my balcony, and I don’t like it. I absolutely will not allow myself to spend that much in 2016. I should only need to buy a few seeds and possibly a few starter plants.

Eating Out
2015 actual: $281.98
2016 goal: $200

Though decent, this number can definitely go down since I’ve given up Diet Dr Pepper.

Gifts
2015 actual: $179.61
2016 goal: $120

I like blessing others, but I need to be more creative in how I do so to get this under control.

Clothes
2015 actual: $60.86
2016 goal: $20

I love this! Thanks to some generous Christmas gifts, I don’t think I’ll need to buy anything this year. I am setting a small goal for myself in case I need new tights or finally find the brown or navy skirt that I have been hunting for.

Christmas
2015 actual: $52.29
2016: $50

I’m happy with this number for 2015 as well so I’m only slightly lowering the goal for 2016.

I’m a competitive person, so I’m hoping by setting goals for myself, I’ll be able to spend even less this year!

Amanda’s Christmas Secret

69681668-3243-45d2-8de0-15cd197bc0dfI have a secret to share with you.

I went into this holiday season without a set budget for Christmas gifts.

So now that the big secret is out, let me explain.

I’m not proud of this tidbit.  Initially, I had a budget lined up (if little else), but that was before the recipient list widened considerably.

Due to many factors, there wound up being seventeen people on our Christmas list this year, and three December birthdays to plan for.  That is a whole lot of dough to spend, particularly if one is an “average” American.  Let’s just say we didn’t have several hundred dollars at our disposal.  (In that respect, I suppose our budget was, “As cheap as possible.”)

I briefly considered going the craft/homemade gift route, but realized I did not have the time necessary to create a thoughtful and creative gift.  Instead I opted to do one of four things for each recipient on our list.

We had family pictures taken and ordered prints. With a coupon coupled with an amazing online sale, this turned out to be a really great idea.  The recipients of this gift (grandparents, etc.) are always appreciative of a personal gift…especially where our kiddos are involved. Bonus:  we got family pictures for ourselves as well, which were long overdue.

We gave a donation.  Using points sites, we were able to give charitable donations in the gift recipient’s honor.  Bonus:  it made us feel like we were contributing to something greater than ourselves.

We gave an experience.  Nothing says “Happy Birthday” like taking someone out to eat at a favorite restaurant.  Bonus:  the restaurant is a favorite of all in attendance!

We gave gift cards and cookies, or traditional gifts.  Although these were among the more expensive gifts on our list, for these recipients, gift cards were preferred gifts, and the cookies added a personal touch, as well as something to “unwrap.” We were able to choose our denomination for the gift cards, which helped keep costs down.

Our kids (and Riley) are the primary recipients of the traditional gifts.  To keep things simple, I adhered to the, “Something you want, something to read, something to wear, and something you need” gift-giving philosophy, so each kiddo is getting just four small gifts from us.  Bonus:  We get to see their little faces light up when they see their gifts. (Although they are very easy to please.  Peanut, for example, would be thrilled with just the wrapping paper.)

Each recipient has either already received their gift, or knows of it, or (as in the case of our kids) can’t read yet, so this post should not spoil anyone’s surprises. But I do want to share one more thing.

We spent around $250 total.

While certainly far below the national average, that is still a lot of money to spend in the span of just a few weeks, and I blame going into it without a Christmas budget.  Note:  there are a couple of gifts under the tree for me from Riley and the kids, and those are not factored into the total…because I have no idea what was spent (though Riley and I are on the same page as far as family finances are concerned, so I doubt it is a huge sum!).

Bonus:  now we know just how important budgeting is.  And this has also served as a great reminder of the true meaning of the season…and reminded me how important simplifying the holidays is.

Breaking Rules

52501482_fcd5405228_mI think it is a pretty accurate statement to say that I follow the rules.

If a doctor tells me to do something, I will typically do it.  In school, I was the girl who adhered to every single dictate put forth by the teacher.  As an adult, not much has changed.

…except when it comes to a few financial rules.

I realize that rules–especially financial rules–become such because they tend to work well when followed.  For most people.  I also believe (and hope I have effectively conveyed on this blog) that there can be exceptions to many rules.  Each family may have a different way of going about their different priorities.  I know our family does!

What follows is just a sampling of some of the rules we don’t follow.  It should be noted here that 1) this is simply a short list of rules that first came to my mind that we also happen to break, and 2) I am not a financial “expert”–your own situation will vary, so when in doubt, get to a professional!

Rule #1:  We save more.  

Depending on which financial guru you follow, the number in your savings account should range from $1,000, to 3-6 months of salary, to many times that.  Since our family has one breadwinner, we have experienced job loss before, and we have little people looking to us to provide for them, we have always aimed on the higher end of savings.

For example, $1,000 would not provide nearly enough of a safety net in the event of a major life event, so we have made our goal higher than that.  That doesn’t mean that our savings account always reflects where our goal is (we have had to dip into emergency savings some this year), but the peace of mind this affords is priceless.

Rule #2:  We use credit cards.

This one is a tough one, because obviously one wants to avoid debt as much as possible.  One could also argue that the credit card rewards are either rarely (if ever) cashed in on, or that the potential rewards do not outweigh the drawbacks (high interest rates, crushing debt, etc.).  I do believe, however, that credit cards can be a helpful tool…when used correctly.  Obviously paying off your balance in full each month is the ideal.

Rule #3:  We pay our retirement accounts first.

I’ve mentioned here before that we have worked to find a good way to fund our children’s education.  It’s still a work in progress, but here’s the important thing to note:  our kids have many options available to them when it comes to paying for higher education.  Our retirement?  Not so much.  So, as much as we love our littles, we pay our retirement accounts first.

These are just a sampling of some of our rule-breaking ways.  While rules may be in place for a reason, it’s important to remember every rule may not be the best fit for your life situation.  And when in doubt, consult with an expert!

Photo by Jem Stone

What is an Emergency?

If you read a lot of budgeting and personal finance blogs as I do, you have probably read a lot about having emergency savings. On these blogs I’ve seen various recommendations as to the size of an emergency savings account: everywhere from 3 months to 8 months.

Personally, I am almost up to 3 months of emergency savings after getting debt-free 5 months ago. In addition to building my retirement savings, I want to double my emergency savings in the next year.

But what really is an emergency? Under what circumstances is it justified to break into this money?

I’m sure that you could get a lot of different answers to that question, too.

In the past, I’ve used my emergency savings for:

1. Paying down the last of my debt. This was a one-time thing, and a decision I made based on my relative stability at work and other resources at my disposal.

2. Living expenses after I made the move to Denver.

3. Buying a couch and other decorations after moving to my first apartment on my own (4 years ago).

4. Car repair expenses (3 years ago).

Of these reasons, I’m happy with the first two, but not the second two. The difference between them is that the first two were planned and deliberate decisions, the second two were I-don’t-feel-I-have-another-option decisions. But looking back, I should have been better prepared for those situations.

Since then, I’ve created my freedom account which gives me the ability to cover such expenses. I also have learned better to do without…though I can still grow in this area.

I hope that this is never me, but if it is, I'll be prepared.
I hope that this is never me, but if it is, I’ll be prepared.

Going forward, I will allow myself to use my emergency savings for:

1. Basic living expenses in the event of a job loss or inability to work.

2. An expensive medical emergency that goes beyond what my insurance and FSA can cover.

Honestly, that’s all I can think of. I have money in my freedom account for car repairs. Before I become a homeowner, I will have a separate fund saved up for housing emergencies and will make regular payments into that fund.

I can’t be prepared for everything, nor do I want to place my security in my savings. But I believe that there is wisdom in preparing for a rainy day.

What do you use your emergency savings for?

Photo by Scott Hughes