Remember the WHY

The problem of buying things you need is that you can’t buy things that you want.

It seems that I want a lot of things.

That is the dilemma that I am facing as my stove saga drags on. Basically, my stove broke and we thought that we would be able to fix it. However, after a visit from a stove guy and a guy from the gas company, we are facing the realization that it may not be worth it to fix the 10-year old stove and instead we may have to replace it.

Yes, we have a “Life Happens” Fund.

We are lucky enough to have the money to pay for a new stove without having to put it on the credit card but that means that the money will have to come out of another fund- money that is earmarked for something else. It doesn’t really matter what the money is earmarked for; we have money put aside for clothes, maternity leave, baby stuff or our 3-6-month emergency fund. Once we are past the amount set aside for “Life Happens” then tough choices have to be made.

Making the Deep Cuts.

The problem with living on such a tight budget is that there is not much in the budget to cut out. I have been very open before about our low-income and tight budget. Honestly, I am more frugal than I even usually let on here. You know that we have only taken a vacation once in the past 7 years but did you know our entertainment budget is approximately $4 a month? I buy myself books from the 25 cent rack of the local bookstore and my kids occasionally are allowed to puck something out from the dollar store. We also get a drink from the gas station every few months- that is the extent of our “Eating Out” budget. I am saying this not to get pity or sympathy but to explain why “cutting something out” is not really an option and when I have to cut something- it’s a deep cut that hurts. Really hurts.

Is it Worth It?

All this is to say that the optimistic post I wrote last week rings hollow. Yes- life happens and we are lucky to be able to have money put away so that we cannot go into debt for this situation but sometimes I wonder whether it would be easier to already have credit card debt so that I can add to it without feeling terrible? Would an extra thousand dollars (or more) make a difference if I was already drowning in debt? Maybe being responsible with money and our commitment to living debt-free is not worth it? Maybe we should just give up? Maybe I shouldn’t work crazy extra hours to make up the money, or live in the one maternity sweatshirt for the next few months because maternity clothes are hella expensive, or take a short maternity leave? Maybe I should just say “Screw it” and throw this stove along with everything else I want onto a credit card like so many other people.

Remember the WHY

These are definitely thoughts I have had these past few days, especially late at night when I can’t sleep.

But even as I sit here typing this out on my terrible laptop I realize that I have made the decisions in life that I have made for a reason. When things get down, it’s important to remember your “Why”. Why am I doing this in the first place? What made my husband and I decide that living debt free and saving a decent amount of money was important to us?

Doing the Best We Can

For us, it was not only one reason- it was a conglomerate of reasons. It was about the life we wanted to lead. It was about the things that we wanted to give to our kids: security and peace. It was about the other people drowning that we want to help, but can only do once we learn how to swim ourselves. It’s about the moral issues with owing people debt that you can’t really imagine yourself pay back. It’s about not wanting to be a burden to our children as we grow old. It’s about doing the right thing NOW even though it may be hard and even if we won’t ever be paid back for our good actions. It’s about doing the best we can IN THIS MOMENT without calculating about whether it will bite us in the future. It’s about making the best decision we can with the tools and information available to us.

So I guess this did turn out to be a bit of an optimistic post. I do feel better after typing this out. And who know, maybe the new stove will be cheaper than we thought it would? Maybe our side hustles will do better than we expect? It may actually all work out. It also may not all work out- but right now we can just do the best we can.

Life Happens

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Disaster Averted

My stove broke. We had a technician out to check out gas line and he discovered an issue with our gas line and where it connects to our stove. Since we rent, the gas line is our landlords problem (thank goodness!) but the stove is ours so we are on the hook for the expenses to the actual stove. I’m pretty grateful that this was caught because its pretty scary to think that we may have used the stove without realizing there was a gas issue. For now, we can’t use the stove until its resolved and we are not sure how much it will cost yet. A technician is supposed to come tomorrow. Meanwhile, we are stove-less.

 

Luckily we have an Emergency Fund!

This is what the emergency fund is for! This is pretty much the definition of an emergency: we can’t push this off (We need our stove to cook especially since the High Holidays are coming up pretty quickly), we can’t skimp on the repairs and we can’t DIY since the gas company will need a licensed and insured technician to sign off on the appropriate repairs.

Should I have Budgeted for this?

There has been discussion about the importance of an Emergency Fund. Someone on Twitter mentioned that its these types of situations that turn people off from having a fully-funded Emergency Fund as a goal. Its better to have budgeted for this situation in the first place.

I disagree. Fact is, you can’t really budget for every eventuality. If we did have an appliance repair line item in our budget- we would have maxed it out a while ago as for some reason all our appliances are needing major repairs this year. I don’t really see the point in budgeting for so many different eventualities. The amount of money you are putting away is the same- the numbers don’t change just because you have more things to budget for. You have a specific amount of money that needs to be divided up into your budget categories. That specific amount does not get bigger just because your budget items do. If you get bogged down with too many categories and line items and envelopes and funds- that is what gets you discouraged. How can you keep up with that? How can you even keep track?

Introducing the “Life Happens Fund”

You don’t need to call it an emergency fund. You can call it an “Inevitable Fund”. You can call it a “Life Happens” fund. You can call it “All the Things I can’t Budget for because I Am Human” fund. The point is the same: its a fund for things that come up unexpectedly.

How We Do It

Currently, we have two “Emergency Funds”. One is the $1,000 Emergency Fund which I think from now on I am officially renaming the “Life Happens Fund”. We picked that number because Dave Ramsey suggests it and it seemed like a good idea. That fund is in a CapitalOne 360 Savings account. If we can, we put the “life-happening” on a credit card and then pay it off (thereby getting some points as well!) but we also can withdraw the money in cash if we need it. Many technicians offer a discount if you pay in cash so its nice to have that option. Our other “Emergency Fund” is what we are still building. This will hopefully have 6 months living expenses in it. This is in a high-yield savings account (Barclays) and is growing awfully slowly. The reason for the incredibly slow progress is because every time we have to use our “Life Happens Fund” we stop funding the “Emergency Fund” and put our money towards our “Life Happens Fund” until it is a again at $1,000. Then we resume putting money into our “Emergency Fund”. It is a definitely a one step forward, two steps back type of situation. But at least there is movement!

Life Happens

Simplify. Simplify. Simplify.

How do you Budget for Unexpected Expenses?

By creating a “Life Happens” Fund you can save money for all those things you didn’t budget for.

Over complicating budgeting, savings and finances are not really in your best interest unless these types of things fascinate and excite you. Simplification is the key to consistency and successful results. This goes double if you have joint lives or finances with someone else. Chances are, even if you are endlessly fascinated by budgets and line items, the other person in your life is probably not (and if you both are, then this blog is probably not for you). Simplifying, reducing and combining as much of your budgeting and finances into simple, manageable pieces will go a long way to having a successful budget and clear way to financial security.