I had to shell out over $900 to fix my AC unit yesterday.
There was just no way around it. It was 95 degrees in my house and my dog looked miserable!
This is a perfect example of an unexpected expense and the reason that having an emergency fund is so important!
Having sufficient savings is crucial for financial success. Not only does it give you a foundation to begin investing money, but it also protects you from unexpected expenses that could otherwise derail your goals and put you into debt.
Based on a study published by Bankrate earlier this year, most Americans do not have enough money saved to cover an unexpected expense of $1,000 or more.
The good news is that I had 3-6 months worth of expenses saved so this was not a castrophe.
Disclaimer: I did pay with my credit card to rack up some points but will be sure to pay in full at the end of the month, as always!
The bad news is that I need to replenish my savings account with funds that I had initially earmarked for finally maxing out my 401(k) or to put towards an IRA account.
That’s okay though! Thanks to saving challenges like Paula Pant’s One Percent Challenge and the Save $1,000 in 100 Days challenge that toloveandtolearn.com just posted, I’m sure I’ll be back on track soon!
Let’s not be like most Americans and make sure we can cover these unexpected expenses when they come up!