This month has been rough on our budget. A couple of annual subscriptions came up (roadside assistance was one of them), which was ok because we anticipated the costs. Even our trip down south was covered in advance.
However, we had to have maintenance done on both of our vehicles this month, and the associated costs were much more than our budget can handle. Fortunately, we were in the process of building up an emergency fund.
This is money which we have set aside for emergencies or other necessary, but unexpected expenses. I hate having to use the emergency fund, even if we have expenses which fall into this category. However, having to put $800 on a credit card for car repairs is not a good option either.
It feels like we lost a much bigger bite than this…
It wasn’t just our car repairs. A couple of other things came up last month, and I anticipated being able to cover them from my side business. I initially put them on a credit card, only expecting them to stay there for a few weeks and not accrue any interest. When the expected income didn’t materialize, I was forced to take even more out of the emergency fund.
Overall, we took $2,000 out of our online savings account! At first it really hurt to do this, because we only had about $2,500 set aside. However, considering that we are trying to pay off over $100,000 worth of debt, it doesn’t make sense to keep putting money into savings while piling on more debt with car repairs and other unexpected expenses.
At this point, I just thank God that He allowed us to build up our savings to the point where it covered these expenses. I know that no one wants to be forced to tap into savings, but that is part of the reason why we save. I’ve been in positions before where I was plowing everything into debt repayment, and when an expense came up, I had to rely on credit cards to pay for it (and was almost forced to take out loans from sites like this one). In fact, that is how my first attempt at becoming debt free failed many years ago!
We are going to try to build back up our emergency fund and continue to pay off debt. Our debt repayment will go a little slower at first, but at least we will be protected from small, unexpected expenses in the future.
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{ 14 comments… read them below or add one }
This is exactly why people have emergency funds and if it was unexpected then I’d say it qualifies. It doesn’t make sense to be paying 18% interest on a credit card because you were too proud to use your emergency fund for what it was designed for. So congrats to you for doing the right thing and using your emergency fund for an unexpected emergency
Debt repayments will be a bit slower but you’ll be prepared in case another minor emergency pops up and your debt won’t increase so you’ll still be making progress. Sorry for the bad fortune but I am confident you’ll be back on track soon.
Lance@MoneyLife&More recently posted..Why I Bought a New Car
Yeah, I had to convince myself that it is the right thing to do. Now we have to build it back up and keep up with our debt reduction as well.
Thanks for the reassurance!
There are certain things that I really dislike paying for and car repairs are one of them. But it has to be done. As you said, at least you had built up your savings and were able to cover it.
Tackling Our Debt recently posted..Room for Improvement
Yeah, it is difficult to pay for repairs/maintenance for us as well. It’s not like you can see where the money went. I just hope we can build up our savings quickly.
Ouch, that hurts but it happens. It’s great to hear you had an Emergency Savings Account. We started putting money away in our budget this year for “projected expenses” so that when the bills came in there was money in a separate account for this. We also put money aside for vehicle maintenance each month as well as CAA. I, like you hated going to our Emergency Savings account especially for stuff we knew we would have to pay at some point in the year. Not it’s a breeze that it’s budgeted in and saved monthly! Cheers Mr.CBB
Canadianbudgetbinder recently posted..How To Help Your Wedding Party Save Money!
That is such a smart idea. We planned to budget $125/month for car expenses, but we just couldn’t set it aside and pay extra toward our debt. Hopefully, that will change in the near future, though.
You are exactly right. It doesn’t make sense to build up the fund when paying off debt and you dug into the fund for all the right reasons. That is why it’s there… You did good even if it hurts.
Jai Catalano recently posted..8 Things You Shouldn’t Do Starting A New Website
With all of the things that have come up lately, I am glad we made the right decision.
As much as I would love to put the money in our emergency fund to something more useful, I’m so thankful it’s there. We had 2 surprises this month with our car and had to get a new starter and then a new battery a few weeks later. Thankfully we’ve budgeted for repairs like this but surprises like this are never really welcomed, regardless if it cost $200 or $2000 like yours! Great job having the 911 fund.
Jessica @ Budget for Health recently posted..Prioritize Your Life
It sounds like you’ve been through a lot as well. I remember reading about some of your car trouble – I think your father-in-law helped you out? It’s definitely great to be able to use cash to cover repairs.
I know how you feel. I’ll be working on building back up my emergency fund after a $3000 car repair bill last month. And I will be setting aside money in a separate “car fund” so the next time my car has a huge repair bill, I’ll be able to afford to pay cash for a new-to-me car.
Wow, $3,000 would have wiped us out, and we still would have had to use a card for some. We want to be able to set aside additional money for car repairs, but we can’t afford it yet.
My wife actually cried when tax time came around this year and we were blindsided by how much we owed. We had to cannon ball into our emergency fund. It was great that the EF covered it, but it was still disheartening because we’d worked so hard to build up that fund. And then building the fund back up is always hard and makes paying off the mortgage slow down. It sucks.
But, I’ll tell you what I told my wife, at least there was an emergency fund so that the expense could be covered! Using it what it’s for is exactly what you’re supposed to do!
TB at BlueCollarWorkman recently posted..Blue Collar Roundup — The Awesome 80s Movies Edition
You are so right. Having the money set aside is the best part of both of our stories. If we didn’t discipline ourselves to build up the EF, we’d be much worse off.
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