This blog contains some simple tips and advice from two regular guys. We're not accountants, financial advisors, or brokers, so follow, ignore, or discuss our ideas as you see fit.

Monday, November 22, 2010

Finally dipping into the rainy day fund.

Posted By Paul

Those of you who follow Frugalize know that Matt and I strongly encourage people to have a rainy day fund ready for life's little emergencies.

I've been building an emergency fund for years and recently found myself in a spot where I actually used it.

Here was the series of events that made me very glad that I had my rainy day fund (many of which are mentioned in prior posts):

1) The roof - even though I saved money on doing the roof vs. paying someone there were expenses related to that which depleted my checking account. (Equipment, supplies, etc.)

2) Leaky pipes - it was a quiet afternoon when I saw the wet patch on my ceiling. Two minutes with a dry wall saw and one bucket of really gross water later and I discovered the leaky pipe. It wasn't the end of the world but it did cost some money to have the plumber come out and fix it. I believe in do it yourself when possible, but when it comes to leaky pipes I don't take chances.

3) Bad washer and dryer - The washer and dryer gave out on us. After many do it yourself repairs and years of faithful service our washer and dryer amazingly both gave out at about the same time. The repairman came and declared them "so broken that it would be cheaper to replace them" which is what we did.

4) Bad dishwasher - Not more than two weeks after the washer and dryer gave out our dishwasher also gave up the ghost. A similar story here. We called a repairman, he came, said that there were major issues with our dishwasher and it would be cheaper to replace it.

None of the above events had a huge financial impact, but putting them all together made for quite a bill.

It made me VERY happy that I had my emergency fund to dip into. Had it not been for the emergency fund we would have had to have either come up with the money some other way (borrow against retirement accounts - bad, putting it on credit cards - bad) or just plain do without those appliances for a while (which would have been doable but a hassle).

So now that hopefully the expenses have settled down for a while (knock on wood) our plan is to replenish our rainy day fund so that it is back up to full power. It was a good lesson for me to discover that the rainy day fund isn't just for an unexpected big event, it is just as likely to come in handy when you are faced with a quick series of small events.

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