Is your emergency fund a topic of dinnertime conversation? At my house it is. Yesterday the bf and I had an interesting conversation about emergency funds. As you might remember, the bf and I lost our car to flooding during hurricane Sandy, and had to use money from our respective emergency funds to buy a new one. While bf has always been a pretty prudent saver (since I’ve known him at least), I’m far more cautious and conservative when it comes to emergency fund savings. Bf would probably be fine with having 3 months’ worth of expenses in his emergency fund (we save separately since we’re not married), but I insist on having at least 6-9 months’ worth of expenses (or more) in mine.
Why? Well, because I’ve had emergencies in the past, and frankly they freaked me out!
I guess you can say that I’ve always been pretty
risk adverse nervous when it comes to money. I suspect growing up an only child to a single mother probably contributes to my desire to be financially secure as an adult. While I never wanted for anything as a child (except for a pony, but I suspect that’s normal across many socioeconomic statuses), I certainly recognize as an adult, that my parents’ divorce put my mother in a precarious financial situation. An amazingly stoic woman, she never complained about how hard it was to work a full-time job and raise a child by herself.
Year later I realize how lucky we were never to experience a severe financial emergency. Having worked in a homeless shelter for 3 years, I’ve seen how easy it is for “normal” people to fall on hard times and lose everything. It’s a sad, scary situation, that I don’t ever want to experience. That fear (rational or not-I know my family would take me in before I ended up in a shelter) is always in the back of my head and keeps me motivated to continue saving aggressively.
My First “Emergency”
Since I moved out on my own at age 18, I’ve been pretty financially independent. My folks couldn’t afford to pay for college, so I attended a private university that gave me a good sized scholarship. I also worked a bunch of part-time jobs. I had my first real “emergency” when I was 21. At the time, I was driving back to school from Maine in my 1994 teal green Chevy Cavalier (a hand me down from my grandparents). I was on 93 in the middle of Boston rush hour traffic, when I saw the caution light come on. I immediately started to panic becasue I was hours away from home and hours away from school. I pulled the car into the first exit I saw and coasted into a gas station parking lot. As steam started coming from my hood I jumped out of the car. At the time I thought the steam was smoke and I didn’t want to catch on fire (silly, but I was scared). A friendly older gentleman who was filling up his tank at the service station came over to take a look at what was going on. I’m sure he saw the terror on my face and wanted to help me out. Instead he muttered something that sounded like, “Oh that’s not good” and suggested that I call my parents to pick me up. The only problem? They were 5 hours away!
Long story, very condensed, I called AAA and had the car towed to a local dealer. The dealer declared the car a total loss and towed it to the junkyard. As I left the dealer I began to cry. I needed a car to get to work and school and I didn’t want to deplete my emergency fund to buy a new one. But you know what? That’s what an emergency fund is for. Thankfully, when my “emergency” came, it was only an inconvenience because I had the money to buy another car.
Do you remember your first financial emergency? Did you have an emergency fund?