"Emergency"

Have you ever noticed that someone can be in serious trouble, but they don't want to call "911" because its not quite an "emergency". Or people have an emergency supply of something, say a flashlight and batteries, but they won't use it for anything, like say a power outage, because it isn't an "emergency".  And yet, an Emergency Fund is frequently robbed for emergencies like vacation, a great sale, replacing a well-used appliance, buying the upgraded widget, etc. What?

What if we regarded financial emergencies with the same sense of urgency and sanctity that we regarded our other emergency lifelines?  What if we planned on things breaking down and on the upgrades we will need and saved for them?

Here's my dream. Indulge me. A spreadsheet (note: I LOVE spreadsheets) with timelines and estimated costs for replacing items so that I can plan on when things will break down and budget accordingly.  Stay with me on this.  What if you bought a fridge, they tell you it will last for 10 years, for example, so you update on your spreadsheet, Fridge, bought 7/23/2013, cost $XXX.xx, estimated replacement 7/2023. You could even put in how long the warranty lasts and when maintenance is recommended if you want extra credit. Then, when you plan your budget, you can know that BTW you will probably have to replace your roof next year and you should replace the hose on your washing machine this month.

Theory in ACTION: I have driven cheap vehicles my whole life. The upside to this is that they are always paid off, the downside is by the end of their life their reliability gets questionable. Knowing this, my husband and I planned on buying a new (new-to-us at least) car and saved for it for years. When the car would go in for maintenance or breakdown, we would knew how much we were willing to pay for repairs vs. replacing the car. By the time we actually replaced it we paid cash for our new-to-us car. It was in the budget and we knew what money we had available to spend on it. Now, we have a maintenance log kept in the car where we note when we replace tires and how long they should last, oil changes, etc. This has been especially helpful because when the car is serviced and they ask you "how long has it been since you...", most people don't know and buy services they may or may not need because they don't know when their last oil change, alignment, what-have-you was, or worse, they don't get the maintenance they need and their vehicles don't last like they should.

The nice part about this is you don't have to have a heart-attack when you find out things need to be replaced. We all know the things we need and use every day will have to be replaced, for example refrigerator, furnace, roof, and we know they are not cheap. If we plan for them instead of just praying for them, we can save our emergency funds for emergencies, like losing a job or unexpected health care. Of course, statistically we could plan and budget for those too, but let's not get too far ahead of ourselves. First things first, make sure you have an emergency fund (experts recommend 3-6 months of expenses) and don't use your emergency fund for new jeans or a timeshare.