why i love my emergency fund

Because when Murphy strikes it is simply an inconvenience instead of a catastrophe!

It's been a crazy past 4 days!  I could go into the whole story, but it would take too long, so I'll make bullet points instead.

• We had a huge storm which flooded our basement on Thursday.
• Our septic tank was backed up Thursday until yesterday.
• My youngest son had a hearing test a week ago (and failed).   
• Allergy test for my youngest on Friday who tested positive for many things....which leads to:
• Cutting down 3 trees in our backyard
• Purchasing a new HEPA vacuum that does great with dog hair
• 2 Epi-pins
• And a complete overhaul of our pantry.
• Minor surgery for my youngest yesterday to have tubes put in his ears.
• X-rays for dog's knee this morning.

While all of these things have been an inconvenience, because we have our fully funded emergency fund, wondering how much any of this will cost and trying to figure out how to pay for it did not add to the stress.

My youngest had quite a bit of hearing loss (a 40% loss in one ear and a 60% loss in the other ear).  It lead to him getting tubes in his ears and allergy tests to see what was causing his problems.  I have absolutely no idea how much his appointments and surgery will cost.  And you know what?  I didn't ask.  I know that our insurance will pay what is covered and that we have our "Flex Spending" account to pay the rest.  If we don't have enough in our Flex Spending account, we'll pay the balance from savings.  That's what it's there for! 

We paid $355 to have the septic tank pumped.

Cutting down the trees my son is allergic to will be about $600.

New vacuum that is supposed to be "the best" for picking up dog hair (another allergy) will be about $400.

Epi-pins $225.

X-rays: "free" (included in the $2100ish we already paid for the surgery)

Pantry overhaul for son's food allergies - have no idea on this one...I'll make a separate post for this issue since I know some of my readers suffer from food allergies as well.  I'll need some advice and menu ideas!

We have someone coming to look at the area in our yard that leads to the flooding.  Not sure what needs to be done to fix it, but we need to get it taken care of.  Had I not been home when it flooded Thursday, it would have caused some major damage to everything in the basement.

We've had an expensive week!  And a crazy one too, but thankfully money hasn't been keeping me awake at night.  Unfortunately, it has kept me busy and off the computer so I have tons of blog posts to catch up on!  But for now...I'm off to do laundry and continue washing the towels that we used in Thursday's flood!

discussing goals with a financial advisor

We set several financial goals for this year.

1. Top off Emergency Fund(EF) with 6 months expenses
2. Save 15% towards retirement
3. Save more for both boys college expenses

We topped off the EF in February and are currently saving 6% for retirement. We have room in the budget to increase this to 15%, but haven't yet made it "official". We have $$ in the boys college account, but currently are not adding to it on a routine basis. (i.e. only birthday checks from grandparents designated for college are going into it.)

We met with a financial advisor a couple of weeks ago and he suggested a few things.

One, decrease our EF to about 3 months and put rest of that money in our retirement account. The next suggestion was to save 16-17% of our income each month for retirement to get us to our goal of what we wish to have when we retire. So, that I was pleased with...it was just about $150 more each month that I've been wanting to do. Moving onto college savings, he ran the #s on what it will probably cost for our darlings to go to in-state public school (about $120,000 for 4-years) and what it would cost to go out-of-state public school (about $220,000 for 4-years). The suggested amount to help cover the cost of this is $500/month from now until the youngest graduates in (hopefully) May of 2024. And, with the $500/month, that will cover about 1/2 of the bill.

So - We've got some things to think about. We worked so hard to get our EF to 6 months and I'm hesitant to move the money around. BUT...my husband's job is more secure now than it was when we chose to save 6 months expenses rather than a smaller amount. Next, it's more important to both me and to my husband to have our retirement savings at a comfortable amount than it is to 100% fund our kid's college expenses. We hope and pray that we can pay the majority of it for them, but they will probably need to work and pay for a lot of it themselves.

We live rather frugally and when we do "splurge" it's usually on things that will make memories, like weekend trips and vacations...not on lots of new clothes, new cars and other "toys". We could give up a lot of things and make it easier to meet our financial goals, but I'm not sure we're ready to do that at this point. We really need to sit down and take a good hard look at it.

I'm curious about you. If you are meeting all of your financial goals, is it because you've made lots of sacrifices in order to do so? And what are day-to-day things that you sacrifice to meet your goals? Just curious...

fully funded emergency fund

It took some time, but we've done it! We have saved 6 months expenses for emergencies. Following the Dave Ramsey plan, we continue to make strides towards financial freedom. We became debt-free (except for the house) on 2/28/09. With the check we received from our income tax return, we were able to top off our emergency fund on 2/28/10! It took a year of "steady plodding", but we got there! This year our focus is on Baby Step 4 and to get our retirement savings up to 15%. We have it in our budget to set aside 15%...it's just a matter of sticking to the budget so that it all balances out. My goal is to routinely be saving 15% by May.

So - the update has been made to the side bar and I'm updating my profile to show that we're on Baby Step 4!