My maths aren’t so good.
For someone who spends more time than the average human being thinking about personal finance, I sure can sometimes be an arithmetic dummy!
As I told you before, Dora the Ford Explorer died, which left me carless. I was all about trying to be a one-car family for a little while. That lasted one week. Husband Saign could not tolerate sharing a car with me when there was snow to be played in. I’m not lying. Sad, sad.
Husband Saign and I had been saving $200/month for a car for me for 2 years, which left me with $5000.00 that was dedicated specifically for a car. I wanted to spend a bit more than this to get a better car, so I decided that I would be comfortable paying up to $8000 for a car. Well, we ended up finding a good deal on the car I wanted for $9000…and the taxes and fees brought it up to $10,0000. Okay! $10,000, no big deal right?
Ada the Dog and I in the new $10,000 car.
Uh…I forgot to do the math. I typically keep about $2,000 in my checking account. If I have excess beyond $2000 in my checking account after all my bills and charities and regular savings are paid, I put extra into savings or pay extra into the mortgage. So, after buying the car and then doing the math of what I need to pay in bills, etc, I realized: I don’t have enough money to pay all my bills! Whoopsie!
I’m so irritated with myself for making such a dumb mistake. Who goes out and buys a car without making sure they have enough money to pay for said car?
Um, me, apparently.
Now, I don’t want to totally blame myself: I should have gotten a sign-on bonus this month for my new job, which I never received. If I had received said bonus, everything would be just fine.
But I didn’t get my bonus check, and things are not fine, so I had to do something crazy that I’ve never done before. I had to dip into the Emergency Fund! Ack!
To make matters worse, I’ve recently had about $1500 in work-related expenses which I will (eventually) be reimbursed for, but for right now, it’s putting me more and more into (self)-debt!
I’m trying to relax about this. Let’s look on the positive side. Here are some things I’ve learned through this mistake:
1. An Emergency Fund is very helpful for anyone, but particularly for those who are bad at math.
2. When making a purchase, it is good to consider whether or not you have enough money for said purchase.
Here’s how I plan to fix the mistake:
1. I’m pausing my long-term savings goal to save 27% of my income for now. (This actually doesn’t put me in a bad spot, as in January I overpaid into my long-term savings…plus I’m not pausing my regular 401k contributions, so I’m still saving quite a bit).
2. I’m pausing my charity contributions for right now. This is not the greatest idea, because my goal is to always contribute 10% of my income to charities, which means that when my finances get back on track, I’ll have a nice hefty IOU to pay to charities.
3.When I get my sign-on bonus check, I’ll repay what I took out of our Emergency Fund, and then catch up on my long-term savings and charity contributions.
4. When I get reimbursed for my work expenses, I’ll send that money to long-term savings.
So, you live and learn. I guess that the whole point of having an Emergency Fund is to bail oneself out after a mistake such as this, right?
Do you have an Emergency Fund? Have you ever had to dip into your Emergency Fund?