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Emergency Schmergency

September 14, 2022 In the (continued) days of #yolo, who really wants to think about something negative that could come. It’s like insurance – you don’t want to pay for it, but you also want a safety plan in case of an unexpected life event. So, while we technically both have an emergency savings, it is where ALL of our savings has been and we’ve never really sat down to decide what is the base amount that we should be keeping in our individual accounts as a base amount. Spoiler alert – it’s not so cut and dry to figure out just how much to keep in there and/or set a savings amount for. For us, perhaps we complicate this a bit as we have separate accounts for our individual bills and then also a joint account for our house and all household related expenses. For our joint savings account, since we bought our house in 2019, we have always kept a base amount in that account which is for our homeowner’s insurance deductible and a little extra cushion for other increases (i.e., tax bill), but our individual emergency savings accounts have been harder to sort out. To assist with this, our coach recently gave us an to read that would assist us in deciding how much of our individual savings we keep at $X for an emergency account, which will then allow us to strategically place the remaining funds, as well as additional future funds, towards our debts and/or investments. So how much do you save? Some say at least six months; others say no more than three as you are losing interest that could be earned elsewhere; and for the extreme’s, a whole year! Honestly, we feel a whole year’s worth is just silly and doesn’t fit our situation, so we’re going to focus on whether you should save for three or six months? We’ve compared the different scenarios side by side below: So, where do we land with all this? As we’re both visual people and this involves some ‘talking it out’, we’ll talk out why we chose the categories we did. Well, shucks – we have a tie breaker. From here, it’s really about comfortability and doing what you think makes the most sense for your household. While we do have some high expenses, six months seems to be a wee bit too much. As Alisa’s debt is a lower than mine, and she also has a part time job, she will keep four months of expenses in an emergency savings account, while I will do five.  Come back next week to read about where you should keep your emergency savings. You might also be interested in Whew and wow! This has been quite a challenging and eye-opening process! It has been very hard to do this project as part of a couple when both of us appear to handle finances and money very differently. If I’ve learned one thing it’s that you can start out with very similar goals and desires but unless you are actually working hard towards them each week, they aren’t easy to maintain collectively! While we probably aren’t in last place, we sure aren’t in first either and that's okay. During the week of November 23, we wrote about how we were going to look into options for cost-saving measures. One of those measures was to analyze any balance transfers that may have been available to us. One of this balance transfers ended up being a very good offer, 0% interest for 18 months with a 3% transfer fee. It was time to take a couple small balances and one larger balance and combine them into what will be one card payment using this balance transfer offer. This past weekend, we took our annual trip down to Chicago, which was also paired with a trip to the theater. With being in Project Money, have been more conscious of our trip expenses and we heavily discussed if we just go down for just the evening or spend the night, like we normally do. With traffic and the unknowns of early winter weather, we decided it would be best to spend the night down there, and so we did. Something that stands out lately are the number of outlets competing for one’s time, attention, and especially our hard earned money. I don’t know about you, but it can be exhausting dodging solicitations and avoiding temptation left and right, especially around the holidays! It seems I can’t make a move without a text, email, phone call, commercial, mailer, advertisement, etc. attempting to draw me in on the next latest, greatest thing I supposedly ‘need’ to buy. Ah, consumerism. If it wasn't so cold out right now, we might not believe that the end of the year is fast approaching, but alas – it is! With that, we have been starting to crunch our numbers and see if we met our savings and debt payoff goals for this year and are starting to make some savings goals for next year. To assist with this, we have also started looking at what are current expenses are, current loan and credit card rates and seeing where we might be able to cut additional costs by either canceling services, negotiating costs and/or switching companies. Initially, we weren’t sure exactly what to write about for this week’s blog post. However, the subject came to us this past weekend as we were reviewing certain aspects of our finances. We both have credit card debt we are working on paying off and recently made sizable progress towards that goal. However, we’ve noticed that our low interest credit cards have recently experienced additional hikes in their APRs (and appear to continue climbing). For example, one credit card has now climbed to from 9.9% to 15.85% due to varying APR with the market based on the Prime Rate. Many of us enjoy hosting parties with friends and family for seasonal activities and Holidays but don’t want to break the bank doing so! For me and Krystal, a Fall Halloween event is one of our favorite gatherings we host each year with close loved ones. Here are some of our money-saving tips to ensure sure the fun doesn’t become overshadowed by ghastly receipts! I don't know about you, but I, Krystal, grew up in a pretty cold house during winter. We lived in a rural-ish area where natural gas did not run, thus propane was our main heating source, until my father installed a wood stove when I was late middle-school age. Nevertheless, the heat in our house was turned down low (better for breathing we were always told, too!) while we slept and were away at work or school. One thing we’re still working through is being a bit more proactive about unexpected house costs. Sure, we have small savings account for house expenses, but mostly this is to cover our homeowner’s insurance deductible. Like my father taught me with my car insurance deductible, I try to pretend this money just doesn’t exist, thus, why we need to plan better for those unexpected house-related costs.  This week’s two unexpected costs were our dryer needing a repair and our fence project taking a lot more money than expected. 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