.. even though I’m debt free! I have 1500.00 set aside “in case”. I keep it in a savings account which is readily accessible – physical brick and mortar bank in town so that I can get it if I have to. I don’t have much other ready cash on purpose, but my BEF is there in case. Just something I’ve always had for that murphy repellant. When I use any part of it (the last time I used some, my sister’s oven went out Thanksgiving week and though it wasn’t MY emergency, it was crucial that she have an oven) I immediately pay it back, by diverting my normal monthly savings plan to the BEF first. In my sister’s case, she paid my emergency fund back and I didn’t touch any of my monthly money in offering assistance to her.
Everybody knows a car isn’t built to last forever, there will be wear and tear and repairs which have to be made to any automobile so I wouldn’t use the emergency fund for the car, but rather the car fund for the car.Maybe a different way of terming the emergency fund. In the example about a car, I would use the car fund for any repairs, and any repair that is beyond my car fund, would then be funded by the emergency fund.
One is my longterm emergency fund and I try to never touch it. The other covers all my sinking funds – I use Quicken to make sure there’s enough in there for everything.
One place where I disagree with DR a little bit is I think $1000 is too small a BEF for many people. I have heard DR on the podcast suggesting to particular individuals that they increase theirs. There are certain “emergencies” that are very predictable. For example the Car Talk guys suggest that an old car takes $600-$1200/year for repairs. If you have an old car I think you should aim for a BEF that’s big enough to cover $1200 in repair PLUS $1000 for the unpredictable. If you raise animals, have enough to cover a year’s average surprise vet bills. That sort of thing. You know it’s going to happen even if you can’t say when.
After I did my budget for a few years, some years back, I was able to come up with a number for my average “one time” and surprise expenses, mostly predictable. The vet, car repair, some sort of home repair, medicine, fees, holiday gifts, life insurance..I added all that irregular stuff up and divided by 12 and I put *at least* that much into the sinking savings fund each month. And then, it’s not an emergency because I have the money to cover it. Even if you’re in debt, I think it’s worth having a slightly bigger cushion so that two things in a row don’t knock you into more debt.
Do you notice that when something like a tranny going out, or a furnace acting wonky when it is 10 degrees outside how much calmer you are if you KNOW you have the money for it? A bef is cheaper than therapy for you rattled nerves or a daily dose of prozak as well.
Don’t get me wrong, our bef has came and gone numerous times, but we’ve always started putting it back immediately after we’ve used it. Even if it’s only $5 at a time, because that $5 is a brick to build a brick house against the big bad wolf Murphy.
I will admit though that I tend to have one account labeled BEF. It contains the $1,000 PLUS my sinking funds for household repairs, car repairs, and emergency vet visits (not to be confused with the monthly vet budget line item for flea drops and such). While I keep ledgers on how much of the emergency fund savings account goes to what account they are all together, so if a really big repair hits say for a new tranny and the truck repair budget only has $500 in it I can “borrow” from the other sinking funds or the BEF to get the repair done before it becomes a bigger problem and therefore more expensive.
Then all snowball money goes to replace the “borrowed” money and the sinking fund is refilled with the normal monthly allotment. It is the only way we’ve been able to battle Murphy for the last nearly four years. It has slowed our snowball down, but we have also been able to meet every “emergency” as it slapped us in the face.
One benefit of my doing it this way is it makes us stop and think “Is this truly an emergency, or is it an inconvenience?” “Do we really want to slow the snowball down to fix this, or can we put up with the inconvenience until we are debt free?” Some things of course MUST be fixed right away. Like the tranny in your only vehicle, but other things, like fixing the readout panel on the fifth wheel—we can do without it until we are debt free if dh can’t find the problem. In the past we would have rushed right out and paid $99 per hour for a rv repair person to work on it, on a charge card I might add. Now we’d rather not hit the bef for something we can do without, albeit very inconvenient.We also find, like Kat, that we can do more and more repairs ourselves. The $1,000 we saved on dh finding the chewed signal light wiring on the camper and repairing/replacing it wasn’t a simple task, but he figured out how to do it and it works perfect.
We have gone through our BS1 and rebuilt it so many times that about the middle of the year, I just gave up and put it toward debt snowball, rather than stopping debt snowball and having a BS1 with nothing to show for it. I guess in reality, I have been doing BS1 in a hodge podge manner, since whenever unexpected things came up I just paid for it, rather than putting it on a credit card. But I never did go back to a separate account for emergencies thing.
So here’s my question. At the end of January, I’ll have $1,100 to put toward debt. Should I just keep doing what I’ve been doing, or should I create a formal, BS1 savings account?
It just seemed last year like there was always something…and I was never winning.
And that was at sunset with failing light, so we finished up by flashlight. Which definitely wasn’t ideal. Also not ideal to do the work in the living room, but since we don’t have a garage or workshop, it was here or out in the cold icky weather. So I’ll tolerate a house that smells slightly of gasoline, over being out in the cold and rain.
Disassembly is usually pretty fast – I expect we’ll spend half a again as long to put it all back together and then get all the adjustments dialed in. We didn’t change any of the adjustments taking it apart, but we found things like one idle fuel mixture jet was at a different setting than another, when they should be the same (and one of those jets was also bent, which just made us think ‘huh??’) And then putting it back on the motor should be another 30min. Hopefully not in the dark. So far we’ve got about 10hrs into it, expect another 12-15 before we’re done.
In the process of that disassembly, we found GUNK completely blocking one of the two barrels (it’s a two-barrel carb). That’s basically the same thing as saying that half a person’s airways were blocked. No wonder I was having issues – my truck couldn’t breathe! Nasty, thick, heavy, black, gunk that is probably a combo of oil and fuel which couldn’t move through the carb the way they were supposed to. We haven’t diagnosed the “why” part yet, but that will come once I post some photos to a Ford Ranger enthusiast forum and have those folks help me diagnose it. But just sitting here mulling this severe a blockage, DH and I figured we would have been into at least $750 if we had taken this to the shop. But by doing this ourselves, so far we’ve spent $95 and two afternoons, parked at a work table in front of the TV on a nasty rainy weekend. Time VERY well spent.
For anyone and everyone thinking to take on a project like this, I think the main thing holding them back is the idea that they won’t know what they’re looking at, and/or won’t know how to put things back together. What I’ve found is that there’s a phenomenal amount of documentation out there to help folks do work like this, and there are forums and discussion groups (like the DR list talks about finances) where folks can post questions and get answers, often with very little turnaround time. The shop pro’s are as close as the computer and the library. I can’t even begin to describe how much this has benefited my confidence in my ability to troubleshoot problems, and “take control” of my truck’s well-being. This was a massive blockage, and now we’re taking care of it, for a fraction of the cost of taking it in for servicing. For folks looking at servicing their own vehicles, go slow, do your homework, document what you do, take lots of pictures, and read read read read read. But by all means, GO FOR IT.
Dale and I undertook our kitchen a few years back including tearing up the plywood to the basement level and redoing the entire thing. The best part was we didn’t get a divorce over it. LOL! The kitchen went back together nicely and it made me realize that we could do a huge undertaking just by reading some directions and putting our minds to it.
transmissions exploding repeatedly. Suffice to say, that wasn’t much fun. Thankfully, most of it was under warranty so it was “only” $1700 out of pocket for the first rebuild; the subsequent rebuilds (two of them) were covered. Even with the warranty work, it was money we really didn’t want to spend that way. And certainly we didn’t enjoy having my main form of transportation, and the farm’s main work vehicle, in the shop for three weeks at a time, repeatedly through the year. Schlepping tons of feed and hay in the back of a Ford Escort loaner car isn’t much fun.
So when my truck’s cold idle started coughing and sputtering, and my starting exhaust was thick gray, and the idle speed would start to race to unbelievably high levels as engine temps came up, and my fuel efficiency went to heck in a handbasket, you can imagine how pleased we were. Those issues started in mid-November, but finally reached a head about a week ago when the old girl stalled on the road at 35mph, while I was shifting between gears. Yes, expletives were muttered. We had another repair bill staring us in the face.
But I recalled some conversation here about shade tree mechanics, and that most car repairs can be DIY, armed with sufficient explanation, the right parts, some spare time, the right tools, and a generous dollop of patience. Sharon in particular amazed me with stories of what she’s repaired in the past. Stuff I never would have dared touch. So when this particular issue started to rear its smoggy head, I knew that the Dave Ramsey gauntlet had been tossed down. Rather than take it to the shop and slap this on a credit card, or even take it out of the emergency fund, by golly we could do this ourselves and save at least some of the price.
So today, while the rest of the world looks forward to another long holiday weekend, yours truly is going to march into the auto parts store, get the carburetor rebuild kit, a new choke thermostat, a few assorted-and-related shop materials, and get to it. I imagine this project will easily chew up the rest of this weekend, and a few more expletives will be uttered along the way. But with any luck 2017 will dawn on my truck with a newly rebuilt carburetor. That should make a nice 30th birthday present to my ’83 Ranger.
Simple is actually pretty simple (lol). They have a website or phone app you can use, and you set up your “goals” which are essentially envelopes. When money is deposited in your account, you can “transfer” funds into your goal (envelopes) and then as you spend money you tell Simple which envelope you’re spending from. Although no funds actually leave your account to go into different envelope accounts, it is all just a construct to help you budget, the first balance you see is called “Safe to Spend” and that amount is your balance less any money in the goals. Beneath it is your actual, full balance (but it’s purposefully very small compared to the STS amount so at a glance you know what funds you have to spend after your goals are fulfilled). And since it’s all in there if you make a budgeting mistake, the funds just pull from your total balance and the amount in each goal envelope will automatically adjust accordingly. You can go in and switch stuff around whenever you want too, It sounds more complicated here than it is, I promise lol! You can make an EF goal and have 1,000 in there to pull from! So DR friendly! They do everything else a bank does like allow you to pay bills from your account and send you a free debit card.
You can also set goals for long term to help establish savings habits. I put a goal up to save $20,000 in 5 years and now it automatically pulls a small amount each day into that goal. If I dont have the funds for whatever is supposed to come out that day, Simple just waits until I do to continue the process (and adjusts the daily amount accordinly based on the time frame remaining). No fees, no overdrafting. If I get behind I can “pause” the goal, or if I get a windfall I can allocate funds into the goal at any point.
The only downside would be if your income was cash-based because they’re online only. So my paychecks are direct deposited, and they have a nationwide network of free ATMS which their app will locate for you automatically with a press of a button (the common ones in gas stations and Walmarts are almost alwasy fee free). However, If you want to deposit CASH you have to buy a money order and take a photo with your phone to deposit it. I think you can also give someone cash and have them write you a check to photo deposit, but thats a lot to ask of someone regularly. I am not in that situation, but just wanted to note in case someone likes the way this sounds but makes cash income (tips, babysitting, odd jobs etc).
Just wanted to share that I recently started banking with an online-only bank called “Simple.” What I really love about them is they allow you to use the envelope system electronically. If anyone is struggling with that, you should look into this bank. Well I guess more rightly they are an interface that somehow gets the bank they represent (which differs by area) to act the opposite of a bank haha. I dont know how they do it, but I am loving it! No minimum balances, no way to overdraft, no NSF fees… it acts like a combo of a credit card and a bank, but you put the funds in there so it is NOT a credit card and does not offer a line of credit or anything. All FDIC insured and all that jazz. They even pay YOU a small return for putting your money in their bank. It is really small, like 2% or something but hey it’s better than 0 or a bunch of fees. If you try to spend money that isn’t there it will just decline your transaction, there is no NSF fee and they won’t loan you anything. No money = cannot spend or try fastest cash loans. Also your transactions always post in chronological order. Nothing is reorganized by value or some other wacky method. And by God, everything posts almost instantaneously! I know this because it alerts my phone each time I spend. So if I don’t get an alert (which hasn’t happened), I know it didnt post. Not like my credit union or any banks I have used where stuff will sometimes not show for a few days because the merchant hasn’t batched or something. If a merchant communicates with Simple to approve a transaction, it shows up! It may pend for a few days until finalized, but it’s there and deducted from my balance so I don’t make a mistake.
concern for my brother in law and our own health issues (we all 3 caught that super crud that has been going around.)
We have been at sixes and sevens about leaving town ever since dbil slipped into a vegetative state, but the doctors now say he may linger for months, or he could go at any minute. Either way he is on hospice and they don’t ever expect him to truly regain consciousness. They said we should all be prepared for “the phone call” but to go on with our lives.
So after much deliberation dh and I decided to hit the road sort of. Because of various appointments with my doctors and the VA for dh we will have to return home for a week in June, and then a few days again in July. Instead of rushing our northwest trip we’ve decided to do these two one month stints a day’s drive from home. That way if dbil passes we could get home quickly, plus be able to return home for the appointments fairly easily. Then in July we will start the northwest trip.
So Friday, we left Oklahoma for Arkansas. We have set up a strict budget for traveling and are eating more meals out of the camper than we have eaten at home in the last few months due to all that was going on at home.
I know to some the idea of travel sounds very expensive, but we’ve done our homework and have had years of experience on traveling on a shoestring. Right now our camping costs us $10 a night because we are staying at Corps of Engineer (COE) parks using our senior’s American the Beautiful National Park pass. That includes our utilities. For $300 a month we are all bills paid in our own camper. In about nine days we will move over to Branson and go to the Blue Grass festival at Silver Dollar City.
We will purchase Senior’s annual passes that will get us in as much as we want for the rest of the year for under $80 each. With the discounts offered with this pass we will also save more than that on any foods we buy there before the year is over. So it will be basically free entertainment.
Because there are often many free or near free things to do in or near the campgrounds our other entertainment is cheap also. Plus dh and I enjoy just hanging around the camper and decompressing. In fact that is what we’ve been doing since Friday. Sleeping late, eating home cooked meals from my dried food storage (we have been eating so good you wouldn’t believe), taking long walks, watching the red headed woodpeckers. Enjoying the antics of the nearby camper’s one year old triplets (thank God it is them and not us!—It was like herding cats for them to keep an eye on all 3 at once).
Peace and quiet are big too. You see we have no wi-fi, our phones are on roaming, (luckily our roaming is free), we’ve not even tried pulling in any tv or radio stations preferring to watch dvds in the evening and listen to music on our computers. When we truly need to get on the internet to research something we can go to the visitor center and use free wi-fi. It is about a 10 minute drive from here. Sure beats paying for a wi-fi hot spot. Between visits to the visitor center we can write up emails, like this one, and prep them for sending, prepare blog and vlog posts and then do the uploads once there. Free is good.
Today, Monday, it has been a steady rain all day. We had planned on going out to a visitor’s center on the dam near where we are and over to do some grocery shopping. Since neither was pressing we choose instead to stay in, read, compose blogs, tidy the camper and cook some great homemade cream of soups. Potato for him, broccoli cheddar for me. All made from dehydrated foods and oh so perfect for the cold rainy day. Then for dessert we had freeze dried chocolate chip ice cream bars. Very good.
So stay tuned, lots of blogs and vlogs ahead, we are traveling finally!
It was rainy and cold until Saturday. Then we went from 59 to 80 degrees and bright sunshine. We took advantage of it to go back into AR both Saturday and Sunday to the site where the amusement park Dogpatch USA was. It has recently been purchased and the new owner is working on revitalizing it. We approached him about being able to go down in the park to fly the quad over it.
He was thrilled because he wanted an aerial view of it. So we went both days, flew it twice, gave him a copy of the raw footage of it and dh is now editing it to put it up on you tube later today. I will let you know when it is up.
We really enjoyed doing it, especially since our first trip as a family was to Dogpatch and then over to Silver Dollar City and now 40 years later our first trip as a retired couple are the same to places.
We are doing real well on not eating out. When we do we have used coupons or gift cards to do so.
Oh one other thing. You know how DR talks about the well to do who live below their means. The owner of dp is the inventor of the Buddy bowl, a spill proof pet water bowl. He invited us into his home, the ski lodge on the property. While the building is impressive it is very basic in its furnishings for him and his HUGE wolf/dog hybrid. He dresses in very simple well worn clothes and is very interesting to chat with. We both liked him.
We’ve never had a dishwasher, our gas dryer didn’t have a hookup when we moved into this house in 2000 and we’ve never bothered to install one, and our range died around 2005. We hang our clothes on a line or rack to dry (inside when it’s cold outside, but we’re coming up on the dry-stuff-outside season). We have a big toaster oven and a hotplate which both sit on our countertop and serve whatever cooking tasks we have, and we have a dish drying rack next to the sink. It’s really not the end of the world.
Having said that, we don’t have little kids; that would probably change the math a lot for us because our meals and laundry loads would all be bigger. But for just the two of us, it’s fine. I remember from being a kid that washing/drying dishes was part of the teenager to-do list, and we always dried laundry on the line. So even with older kids in the house, some division of labor would take care of two of those three appliances.
I’d suggest getting creative with “doing without” for awhile, and save up the money for general repairs rather than dipping into the emergency fund. You might find, as we have, that we really don’t miss those appliances. Or, you might find that you really truly gotta have one of them repaired NOW, but the other two can wait. And then you’ll have your answer. And your money.
Also, thanks Eldred for sharing that link. We’re firm believers in DIY work, and we repair most of our own stuff these days. That can save 90% of the repair bill, if/when you decide that appliance really does need to be up and running.
I know, everyone’s mileage may vary but here goes. I would probably go with the oven first, because it seems like a cheap fix, especially with a handy man in our house. I figure we could order the part and dh could fix it. Plus we need to eat and an oven is used here at our house weekly, if not several times a week.
Second, I’d go with the dryer. I cannot even imagine lugging wet clothes from one floor to another. (Thankfully we live in a single story home.) We have temporarily been without a working washer before. We would take the dirty clothes to the laundromat to wash, then lug home the wet clothes to dry them. It was a chore and I hated it. Actually I hated feeding the coins in more than anything but lugging wet clothes was a close 2nd. To me my time is worth something and all that lugging seems like a time eater. So my 2nd thing to fix, very close behind the oven, would be the dryer.
The last thing I’d fix is the dishwasher, simply because a dishwasher is totally not necessary and a total convenience. Yes, I love mine, we use it several times a week and I’d had to have it go out completely. However, if I had to do without one appliance for an indefinite period of time, it would be the dishwasher. Hand washing is an cheap, easy fix for the moment, for an extended period of time or for a lifetime. People lived without automatic dishwashers for 1000’s of years.
Anyway, that is what I’d do but everyone is different.
I just had to do it to my almost 40 yo oven. It is an apartment sized oven, so it is cheaper to keep repairing than to purchase a new or full sized oven/stove. The cost of the coil was under $50 and my husband fixed it. I did look at different online places to purchase the coil because Sears wanted double the money and 2 weeks to get it to me.
My husband now have our emergency fund back up to $1000 after several problems with dealing with my 80 year old MIL MIL decided to move closer to us but of course didn’t have the money to have herself moved ect. We rented a Uhual and my 2 sons moved her (I packed her up) and then we find out she needed to pay 1 weeks rent because she didn’t give 30 days notice ..she is in subsided elderly housing and has had mental health issues her whole life. She also didn’t have any money for food ect after we moved her. We used part of our emergency to move her and make sure her fridge was full. She did pay us back and now our emergency fund is back up My dishwasher broke about 1.25 years ago and we decided not to call the repair man and wait ..now our basement dryer broke (we happen to have a stackable washer and dryer set upstairs for the kids so we are dragging the wet clothes up to the 2nd floor from the basement to put in the dryer, (the washer to the stackable set went about 2 years ago.) So since we do have 1 working washer and 1 working dryer and it is not an emergency should we just save up more money before we call the repair man? Also I have one of those Gemini stoves that have 2 ovens and the bottom oven burned a coil quite a while ago but again since small oven works we have been making do If we do call the repair man we are going to have him look at the dishwasher also since you pay 1 fee just to have him come to the house. I not sure what it will cost to get all these appliances fixed!