http://www.moneysmartlife.com/2006/12/10/patching-the-crack-in-our-monthly-budget/
I think this is why the first step in most programs for debt reduction say to start an emergency savings fund. I know, but have I done it? NO! Not yet at least. But then I am not in 100% control of things right now. In fact it is becoming an increasingly more difficult struggle over finances here...
So, how would we handle such a crisis. {We have glass coverage on the van, so as long as it wasn't one of the kids fault we'd only have a deductible to pay, but other emergencies happen} Like last year, when on Dec 21st we woke up to a 51 degree house. Hmmmm that's odd, the furnace should be running.... oh my furnace died, the wiring actually fried, we were lucky it didn't start a more serious fire.
So we bought the coal furnace (http://thefrugalmomma.blogspot.com/2006/12/snowy-day-in-wny.html ). We thankfully had been saving to replace the furnace & had some money set aside (enough to cover the install, fuel & a first payment on the furnace). Of course I found out in June that we hadn't made a payment in months...but that's another post about sharing responsibility & decisions & earning trust...
I have read that a good emergency account is 3 months pay. OK, that amount of money will take years to build up. Unless you are single, renting & would like to live out of your car for 4 months (you still have to pay for the car right???). I know that the way to become wealthy is to pay yourself first, but emergencies happen all the time. The furnace wiped us out completely. All of the money we saved was gone, now we find ourselves starting over again. So how much do you sock aside, when you don't make enough to pay the bills to begin with.
I know that we are putting our biggest expenses to work for us. Our house is a 3 unit, do I like living with tenants HECK NO, but the extra $ every month helps us keep our payment to a minimum. So we got 2x the house for the same money.
Our next biggest expense was the ice cream business, long story but I am pretty sure that ship is sailing away! So, that one didn't work out this summer for us at all, at least last year we did a little better than break even. This year, I know it is still costing us... Why am I not the one in charge??? Grrrrr. All of the things I said wouldn't work, guess what THEY DIDN'T!!! Ah such is life.
Our 3rd biggest expense (not really monetarily our biggest, just the first one I would cut if I could) is our DSL, thankfully I convinced him to drop the cable modem...We get our DSL for $45, the cable was $75. So we saved $30 a month there, but of course DH needs it to work, dial up just isn't fast enough for his up links. At least it's mostly deductible. So we need to make the Internet work for us. I know he is looking at other things to do (selling high demand items, google adwords, etc).
I wish I could say the candle consultant business is going to save us, yeah right!!! I am really only doing it thinking I'll get out of the house & be around adults once in a while... Plus it isn't really something I want to go out & do 5 nights a week, I'd be happy with 1. Of course at 1 night a week, it just about keeps you busy enough to not be profitable, so we'll see. Postage alone is crazy!!! (Deductible at least, but then you need income to deduct from right!)
So I am adding to my list of 2007 Goals to save $100 a month (in an account) for emergencies!
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