As we move into the summer season, what would you do as a homeowner if your air-conditioning system went out today?
Would you be able to pay for the repair (or a replacement unit) out-of-pocket?
According to a recent article, 56% of Americans can't cover a $1,000 emergency expense with savings (cnbc.com). This means that most families would be in big trouble if something happened to this essential home item.
Almost a quarter of those surveyed said they would borrow the amount (credit card or personal loan) to cover such a setback.
10% said they would ask family.
Only 44% said they would have the cash to handle the problem.
When my family’s A/C unit went out recently, the cost to cool back down was $1,750. Within the past calendar year, we have had additional necessary home repairs, an emergency dental crown, and three flat tires. Adding these to the HVAC dilemma, we have paid $3,510 in unexpected expenses.
Fortunately, we were able to pay for these nuisances in cash because we have an emergency fund north of $15,000.
Getting to a place of having a significant emergency fund, which my wife and I were only able to build after we paid off all our consumer debt, was NOT easy. It took hard work, sweat, and tears to get to this comfort zone.
Having this umbrella means cooking dinner after a long day of work when you don’t feel like it.
It means making a grocery list, meal planning, and food inventory before going to the supermarket.
It means comparison shopping and buying store brands when possible.
It means that restaurants are a special occasion and not a routine.
It means taking vacations you can afford and pay for in advance.
It means not getting bogged down with debt payments so you can save and invest more of YOUR money.
It means continuing to add to the emergency fund as part of a monthly budget.
It means being the calm voice of reason when your spouse is having a moment of weakness.
It means telling your kids no sometimes.
It means being responsible so that you can protect your family when Murphy’s Law says it’s your turn.
It also means that when Murphy does show up, you can quickly pay him to go away.
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