Published on June 15th, 2011 | by Pete1
How Not Having an Emergency Fund Can Leave You Clutching at Straws
If you are a regular reader of this blog, you will know that I recently had some car troubles, which led to some surprise extra cash. Well, the cheeky fairies of fate have been working their magic, and the clutch in my car has abandoned all home. This means that I have been carefully sculpting biceps that Mr. Schwarzenegger would be proud of, as the required force to get the car to even consider popping into a gear for me has been simply immense. Anyway, I realised that the situation could not continue and booked the car in for a repair. The repair happened and the car is now working fine. This is good. Unfortunately it cost me £335. This is less good. I did not have the money. Luckily I have a dad who is in a position to help me, and the debt can go on the slab. I am aware that not everyone is fortunate enough to be in the position to ask someone else to lend them the money, and it left me wandering what I would do in this situation should I not be able to access help from my dad.
Every time my car needs repairs, I currently have to borrow the money from my dad. The reason for this; I have no contingency plan. I’ve been so focused on repaying debt and trying to avoid accruing more, that at times when I need cash to resolve a crisis, I don’t have it. I’ve decided to set up an ‘Emergency Fund’. If I put aside £10 a month that I would normally use to reduce my debt, it means that if I need money for car repairs (or any other type of emergency) than I can hopefully cover some, if not all of it. It’s also a bit embarrassing going to my dad, cap in hand, every time the car goes kaput! So there we have it, just some thoughts about planning for the unfortunate surprises life occasionally throws at you…