It’s raining in the Ogden house. In fact, it’s pouring. A few weeks ago our ice maker stopped working. Two weeks ago it was our tv – the one we use 95% of the time. The other night Mr. O went to get some ice cream and noticed that it was more cream than ice. Ugh. It’s a good thing we have a rainy day fund!
The thing is, no matter what your situation in life, homeowner, renter, or living in your parents’ basement, you’re going to go through a period when it feels like everything you own is falling apart.
So before you find yourself standing in the rain, it’s best to get yourself an umbrella.
How much do you need?
If you’re looking for an Emergency Fund, you really should check out this post. It goes over everything, including a downloadable excel spreadsheet that will do your calculations for you.
But if you’re just talking about an occasional run of bad luck, stick around.
Think about the things you use every day. Things that you’d be hard-pressed to live without, even for a few days. Your cell phone, your car, maybe the washer and dryer…
How much would it cost to replace or repair those things? A new cell phone could run you a couple hundred bucks. Repairing a car might be $1000, and a washing machine repair is another couple hundred.
Really, any dollar you have on hand means one less dollar that goes on your credit card.
And remember, you should NOT dip into your emergency fund for rainy day items! As tempting as is may be, you don’t want to get caught without a full emergency fund.
Where to get the money.
This depends on you. There are lots of options.
Saving up a few hundred dollars for an emergency can be as simple as skipping your morning latte, or dropping your gym membership in favor of working out at home.
At our house we’re always saving for one project or another – right now we’re saving for central air conditioning. We have a digital envelope in our Capital One 360° account for our current goal, and we simply take money from this account when we have a rainy day. Because central air isn’t a necessity, it’s okay to take a step back from that goal, but it also makes us think about how much we really want or need the item we’re fixing or replacing (the tv got replaced, the ice maker isn’t getting fixed).