Breaking glass on emergency fund
Over the last roughly 24 hours I hit a breaking point and budgeting is driving me nuts. There are simply too many expenses that must be met early this month that cannot fit in the current realm of things. I don’t want to be hit with any bank fees for not having enough money to cover checks that are now hot. To stop the pressure and ease my stress I am removing $300 from my emergency fund. I do not want to drop the EF below 1k because it will rain again in the future.
What is making things partially difficult is trying to get my wife to be on the same page here with our financial situation. The other problem is she is still in school trying to finish up her masters and is very stressed out over getting homework and such done for classes. I want to talk about our financial situation just brings more stress and she really does not want to take part of it. To her we have this 1k just sitting out there that could make up for any shortfall so I should use that. My rebuttal is the car insurance bill is not an emergency expense and we just need to watch where money is going this month so normal household expenses are met. If we burn through the 1k emergency fund every time something starts smoking, it will be gone very quickly.
Either way though we need to get a budget figured out quickly because she is student teaching in the fall and our income will decrease slightly. I think what it will come down to is I might have to get a second job to keep things the way they are, or we have to live on less. Next month does not have any huge expenses other than the mortgage so we will use July to practice playing budget. Something has to give here and I think our lifestyle is about to be rocked here in the coming weeks.
If you’ve written hot checks, dig into the emergency fund. Its much better to save yourself that way than to get hit with a mountain of charges!
Have you ever tried online banking? Bill pay service lets you pay things in a flash (I pay $6/mo for bill pay service with Wells Fargo) and you can also issue individual checks through it. You get a record of the payment, plus the bank guarantees delivery by a certain date and will refund any late fees you are charged if they don’t get the check there on time.
Bank of America offers FREE Online Bill Pay and they guarantee everything also.
To your original post- best to dig into the EF to get yourself out of trouble.
Have you read- How to get out of debt, stay out of debt and live prosperously- by Jerrold Mundis? Excellent book that would definitely help.
I agree with the others - if your checking account is going to turn red, that’s an emergency! I have spent WAY too much money on overdraft fees in my lifetime. I do understand what you mean about the emergency fund, though. When you’re living paycheck-to-paycheck, everything feels like an emergency and it becomes hard to decide when to use it or when not to.
Car insurance always breaks my budget, too. This time around I’m delegating a specific savings account so that five or six months down the road when it’s time to renew, I’ve already got the money earmarked.
Good luck!
Thank you all for the feedback on my ugly budget crisis situation. Things for now are at least calmed down and I feel better that the checks out there will clear without NSF charges. My wife is starting to come around on the whole idea of a budget. I think she feels that if we have a budget she won’t be able to do anything. What I ended up telling her is that the budget is more of a plan of how we’ll use our money and know where it is going, instead of wondering where it went. Failure to plan is planning to fail. Obviously if less could be budgeted for certain things and we make some sacrifices (i.e. eating out) it would free up the cash to pay off our debt. The other idea we’re looking at is selling our house and moving, more on that later.
How about not referring to your “budget” as a budget at all. I call mine a Spending Plan. It makes me feel more in control because “I” decide where my money is spent. Just the sound of “budget” conjures up evil pictures of chains! LOL
Your wife might like that terminology better.
I like Maria’s idea. Or maybe just call it “managing the bills”. Take care of the bills first, allocate funds to paying off debt, then the rest is spending cash. Sell it as a way to take care of all the important stuff so when you end up with whatever cash left over to spend, you can do it guilt free!
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