Why Have an Emergency Fund?

Most financial writers, planners, and teachers recommend having an emergency fund.How much varies, some say $1000, some say 3 months, or 3-6 months worth of household expenses. Why? Well, the emergency fund is supposed to be your insurance against going into debt when that unexpected, but inevitable thing happens.The idea is you are your own bank, you can borrow from you.How much do you really need to survive? Bare bones? I always like it when I have a bit of an outline, so I will share what our bare bones are.
Mortgage
Home Insurance(we pay once a year, but set aside the monthly amount each month)
Property Taxes(we pay once a year, but set aside the monthly amount each month)
Terasen Gas
Fortis Power
Medical Services Plan
Vonage(VOIP)
Cell(we are on a plan, so even though this isn't a necessity it can't be left off, it is only $28 all taxes in per month)
Gas
Groceries
BMI(Water)
Car Insurance(we pay once a year, but set aside the monthly amount each month)
Life Insurance(we pay once a year, but set aside the monthly amount each month)
Grand Total is what we need to survive on.(A normal budget would include giving and saving but that's when there is an income).
 As, I have written before we were really working at getting past one month of expenses saved. Well, we finally did! Taking on an extra job we stashed away another 3 months...just in time! We got our emergency! Hubby's place of employment closed down! So, once again...I can say having an emergency fund is really, really important.
Where to begin?Start off small if it seems like a huge undertaking. I know how you feel, it felt impossible to squeeze anymore from our income....be encouraged you can do it. Once you get your $1000 you have already started taking steps backwards from the financial debt cliff. Having an emergency fund takes away some of the panic that can be involved in a backed up sewer, blown tire, or job loss. Having an emergency fund gives you some options. Suddenly you don't have to hurry up and decide, you can think about it. There is another thing that kicks in....you know how hard you worked to save that money, so you may be more thoughtful when making that big ticket purchase..how much do I really want to spend? When charging a purchase on a credit card, it feels pretty hopeless and kind of like it's not your money anyways..so maybe there's a bit more impulsiveness to our spending?
We have spent many years gathering up a small emergency fund, having emergencies, and then starting all over again. The good news is we don't charge us interest! If we had to use credit cards or lines of credit the interest charges would be hefty! How are you doing getting your rainy day fund????

Emergency Fund

Emergency Fund

Some of you may be familiar with the Dave Ramsey steps. For those of you who aren't they are:
1.Get $1000 in the bank
2.Pay off all debt(not including home)
3.3-6 months expenses saved
4.Maximize Retirement Investing
5.College Funding
6.Pay off mortgage
7.Build wealth
There are all sorts of different financial step plans out there, and I like to combine several to make our plan. What I notice, and I am sure you do too, is that whether or not we save for emergencies, they happen. So, getting the $1000 into the bank is a mini emergency fund, for when you blow a tire or the hot water tank goes! Now, $1000 is a good goal and is a great starting place. Sometimes, it feels like a monumental task and no sooner do you get your $1000, but you also get your first emergency! The good news is it's you you borrow from, not a credit card or a bank! Eventually, we will want to get the 3-6 months expenses saved. This is the step we are working on. It has been a step we have been on for a very long time. Finally, we managed to get one month's expenses stashed. It seemed like such a big climb to get to this point and so my mind set is I need to keep going forward, save another month, not backwards(have an emergency).What is an emergency? My definition is an emergency is something you must have, a necessity(unfortunately a trip to a sunny place seems like an emergency in winter, but it's not).The fridge goes, that's an emergency. Now, the next challenge is what kind of new fridge do you get? Top of the line, all the bells and whistles? That's where personal choice and personal goals come in to play.
We just recently encountered our emergency. Hubby's crown(on his back tooth) popped off! So, we visited our dentist and he said it was going to be a several thousand dollar fix! Hubby wanted a second opinion as he was sure there were other options. So, he saw another dentist who did provide several options.
Option 1: Glue it back in $125...this is a temporary fix
Option 2: Redo it $1500...good for another 7-10 years
Option 3: Implant $4000...good forever
He also told us that this crown should not have failed so soon, it's only 3 1/2years since it was done. He suggested we contact the dentist and see if he has the standard 5 year crown guarantee. This sounds great, but the original dentist lives a province away!
So, we are trying to figure out what to do. First, I will check to see if our dental plan will cover any of it, we are told it's unlikely. We are looking at all our options and trying to choose the best one.
This is an emergency and therefore it is reasonable to use the fund. This is why this fund is set up. The fund saves us money, we don't have to charge anything we just use our own money. The fund gives us a sense of margin, room to breathe when bad things happen.What are your thoughts? Do you have an emergency fund? What kind of world would we live in if everyone had a little margin?

Buying a Fridge

Last week I was out of town. While I was away my fridge quit! Hubby tried to fix it but it looked like it was going to be an expensive part. Once again we were thankful to have a little emergency fund left, as this qualifies as an emergency! As I said I was out of town and hubby was home. He shopped around home while I shopped in Surrey. I learned that BC Hydro gives rebates for energy efficient appliances.

This is from their website:
Refrigerators must be at least 25% more efficient than the federal standard.

 While shopping I learned that until the end of Oct, the usual $50 rebate for qualifying fridges, from BC Hydro, is doubled at Future Shop and Home Depot.(for a complete list of all the store deals with double rebates look here .) There is an area where you can check all the brands and models to see if they qualify here . It wasn't easy to find one that qualified AND fit my spot!
Turns out that finding a fridge to fit in my spot was WAY harder than I thought! At Home Depot online they took my measurements and out of all the fridges they had only 4 would "kind of" fit my spot! Turns out
fridges have become taller over the years! So, thankfully I have a handy hubby who was able to take out my cupboards above where my fridge goes. Once we could handle more height our options were increased!
Next problem was color! I have white appliances right now, but I was encouraged to go stainless steel. I wasn't sure what to do about this as I don't want to replace all my appliances(unfortunately I will have to, but I don't want to rush it!) and I wasn't sure if it would look really strange(like it would be the first time something at my house looked strange! :) .
So, I arrived home on the Friday of Thanksgiving...my parents and brother and his family were on route to BC. The first night dinner was at our house! Thankfully, hubby had narrowed the shopping down to 3 stores. The first was Wagner's Appliances, which has scratched and dinted appliances. They had the same fridge I had been looking at in Surrey, but for a considerable discount as it had a bit of a wow in the front panel. (It is hard to see and can only really be picked out if you are really looking for it.) The next 2 stores had similar fridges for lots more money, and only one year warranty(Wagner's gives 2!) I just couldn't see spending more for gadgetry(digital water outside the fridge..wouldn't those be fun buttons for kids!) that I just don't need. These fridges were going to double the price! We went back to Wagner's. They threw in delivery and old fridge removal and were able to deliver that afternoon!
So, I went shopping and hubby went home to unhook the old fridge and wash behind it(isn't he a gem!). By the time I got home the new fridge was in place, running and full of food! A happy ending!
Imagine my surprise when I got home and checked the BC Hydro website and found my new fridge qualified for the rebate! And to top it all off, Wagner's does airmiles! So, that's a nice little bonus.

In summary.....Ways to save on appliances
1. Shop around(even if it's quick because your much needed appliance dies). Our fridge died on Wednesday and hubby did coolers until friday!
2. Only buy what you need, try to ask yourself if the bells and whistles are what your family really NEEDS. If you think you can't live without them, then that is what you need.
3. Have an emergency fund....emergencies happen whether you have one or not...having one saves stress :)
4. Look for rebates, buy back programs, or sell your old appliance for parts???
5. Pay cash(or if you are a points or cash rebate credit card carrier use it but pay it off before it's due)
6.Another option is to buy used, but be sure and do your research before buying.
7.Ask other people about their fridge and what they like and don't like






PS. If your fridge is still working BC Hydro will buy it from you for $30!

How's it going???... and back to school sales....

Hubby took this picture while we were on a hike!

It's a funny thing, a blog...you make friends all over the world, people you've never met. You share information about whatever you are passionate about. It's tough to know how much to share as it is such a wide open space....I always enjoy hearing what's really happening and so I will do to you as I would like done to me. It has now been a month since hubby's work place shut down. He was eligible and we applied for unemployment insurance, right away. In the meantime he was asked to do a couple of jobs in his area of expertise. It was piece work. He claimed it on his EI reports and everything that might have started came to a grinding halt.  His file is now in review and whether or not he'll get benefits is unknown. I feel frustrated with the system, punishing honesty. It would have been easy for them to just subtract the few dollars made from the few dollars he was going to get, but it seems like the message is don't even try to work. Anyways, I don't want to rant, the subject makes me ranty(I have decided this should be a word!)....Here again I am thankful for an emergency fund. Dave Ramsey always says don't rely on the government, ever. So, our first month we managed to live on his last paycheck! That was happy! Now we have 3 full months of monies left. We are putting some stuff on Castanet and Craigslist, that frees up space and money!

 His work is quite specialized and there aren't many companies in our town, but he's contacted them. Some have shown interest in giving him contract work if he had his own set up. Something to think about. I think I stressed in a post earlier, how awesome it is to have an emergency fund, but I'll say it again...stash teensey bits away each month..it will add up, you'll have wiggle room if something happens. Wiggle room is really nice.

Back to School Sales are starting!? Staples has some great deals.

Hilroy 80 page coil ring note books are .15(limit 6)

150 pack of lined paper is .19(limit 6)

Exercise Books 4pk .25

See their flyer for more

Costco has a screaming deal on blank photocopy paper 800 pages for $5.19 until Aug 7

Bic Pens 56 pack $4.49

Total Financial Health is Cumulative

I was doing an exercise video yesterday and the instructor said, "Remember total health is cumulative."
This got me thinking and I looked up the defintion.
The Miriam Webster's definition of cumulative is
1 a : made up of accumulated parts b : increasing by successive additions

So, if I continue to do these exercise all the little moves will add up to more flexibility and better movement.
Then I thought how does that apply to our finances?
Well, our little acts of making a spending plan each month, striving to do what we said we were going to and then doing it again the next month adds up to better financial health.(even if you don't do it perfectly!!you are still doing better)
For example, if you want to get an emergency fund of $1000 in the bank(Dave Ramsey's baby step 1). This will probably mean small shaves from your spending each month until cumulatively you have $1000.
When we saved for Hawaii it was 2 years cumulative saving. I guess it reminds me of the saying, "How do you eat an elephant? One bite at a time." Be encouraged with your one bite, it may seem small, but it's adding up!