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View Poll Results: How do you pay for unexpected expenses?
Use Savings 92 85.98%
Reduce Spending 7 6.54%
Use Credit Card 7 6.54%
Borrow from family/friends 1 0.93%
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Old 01-21-2016, 05:33 AM   #21
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Originally Posted by travelover View Post
But if they are planned for, are they really unexpected?
not if you're smart.

I may not have expected THIS to break, but I knew SOMETHING would break, because that is just what happens.
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Old 01-21-2016, 06:02 AM   #22
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I am watching a Dave Ramsey group they are so bad with money they consider every little thing a shocking emergency. First time in their life they attempt to keep $1,000 emergency fund yet things keep going wrong, who thought that could happen?
I don't even think about things being an emergency to worry about like I got a flat tire, but on spare, buy four new tires. I used a credit card but never pay interest, I got tires for the car and truck last year and a new roof, the roof leaked but I sold some investments and paid 11K for a new roof with no wondering how I would get the money, if that didn't work I would have used my HELOC or credit card but they wanted 3% for credit card, I did get a senior discount.
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Old 01-21-2016, 06:31 AM   #23
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Originally Posted by old woman View Post
I am watching a Dave Ramsey group they are so bad with money they consider every little thing a shocking emergency. First time in their life they attempt to keep $1,000 emergency fund yet things keep going wrong, who thought that could happen?
.
We have family members who live from paycheck to paycheck (no savings). Anytime there is an expense they can't pay, it's an emergency. These are good people and work hard, but the word "save" is not in their vocabulary.
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Old 01-21-2016, 06:54 AM   #24
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I used to see a version of this often in my dental practice. Patient retires early, then needs a filling. Then complains to me that he can't afford it because he's "on a fixed income" now...

I'm thinking the guy is a putz because either he retired too early, or didn't plan on the fact that "stuff happens" regardless of how "fixed" his income may be. I have to admit, it would kind of frost me that I was supposed to somehow feel sorry for this guy who was younger than me and retired, and I'm still working because I want to still be able to pay for my life.
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Old 01-21-2016, 08:03 AM   #25
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I wanted to choose both "Use Savings" and "Reduce Spending".

Late last year I had to spend $11k on new furnaces. I just paid the bill from my bank account that held a year's spending and was waiting until the new tax year to top it up again....then the bear market started so I'm trying to avoid selling anything right now. So I'm cutting spending to get me through to September when my pension begins. I should be ok as my spending is $2k per month and that includes everything like health insurance, RE taxes etc. and my savings/rental income can support a burn rate of $3k/month. If I have other unexpected expenses I'll start taking dividends rather than reinvesting or sell TSM in taxable and transfer some Wellesley to TSM in retirement to rebalance.
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Old 01-21-2016, 11:22 AM   #26
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Oh, why can't they just come right out and say "I have a small income."

When a working person hears "fixed income," I think the response is something like, "Gee, it must be nice to have a 'fixed' income you can count on. Mine isn't 'fixed' - it breaks and goes away if I don't go to work!"

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I used to see a version of this often in my dental practice. Patient retires early, then needs a filling. Then complains to me that he can't afford it because he's "on a fixed income" now...

.
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Old 01-21-2016, 11:32 AM   #27
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From the article:
Quote:
The washing machine broke, you chipped a tooth and the dog needs to visit a heart specialist. And that was just Tuesday.

Unexpected expenses are almost guaranteed to occur, but few Americans are budgeting for them by stashing money in savings each week or month, the latest Money Pulse survey from Bankrate.com has found.
I've always found it strange that any of those things would be considered unexpected. I budget enough to replace an appliance and fix a busted tooth every year (family of 5; sh1t happens).

I suppose it comes from a failure to track what you actually spend money on each year. I know we have these "unexpected" expenses on a very routine basis year after year. The unexpected part comes when we DON'T suffer one or more of these expenses.
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Old 01-21-2016, 11:48 AM   #28
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I have to agree with most folks here, for most "unexpected" (I would say "didn't plan for that THIS month") I would just put it on one of my cards for the cashback and pay it off. Since I have a decent amount of $$$ coming in each month, I hold very little cash (about $8,000 to $10,000 depending on the month) and the rest is invested. So, if there was something significant (over $10,000) I would probably look at using my HELOC. The interest rate is @ 3.75%, so that would most likely be cheaper in the short term than selling off any investments (at a loss if I *had* to sell today). Any time I "draw" from my cash reserves, I simply reduce my contributions to my investment accounts until I replenish it to a "comfortable" level.

Just for grins, I figured out how much it would cost me to draw $25,000 from my HELOC...it would be about $78 a month....that is indeed cheaper than selling off at a significant loss or even worse, using a credit card (at 13% interest) that would cost $270 a month!!!

Speaking of "unexpected costs", this reminds me of this story. Basically, someone wants the Georgia Supreme Court to change the "value" of a family dog. Right now, it's just the "purchase price" of the dog. The plaintiffs are suing for negligence in that a boarder gave the wrong medicine to the dog and it resulted in renal failure and the total costs of medical treatment was $67,000!!!! I do love my dogs, but I don't think I love them THAT MUCH. I am not sure what my monetary limit would be for medical care for my dog, but I can tell you that it's MUCH LESS than $67,000!!!

Court to decide the value of a dog in Atlanta case | www.myajc.com
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Old 01-21-2016, 08:00 PM   #29
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not if you're smart.

I may not have expected THIS to break, but I knew SOMETHING would break, because that is just what happens.
+1
Didn't vote because there was no category for funds allocated to such miscellaneous expenses.
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Old 01-21-2016, 09:18 PM   #30
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Originally Posted by aja8888 View Post
We have family members who live from paycheck to paycheck (no savings). Anytime there is an expense they can't pay, it's an emergency. These are good people and work hard, but the word "save" is not in their vocabulary.
I think the most valuable thing I learned in my mid-twenties was "pay yourself first". I put my savings on auto-pilot and then whatever was left and hit my bank account was available to be spent.

Back in that day and time it was a bit of work though... I set up a bank account at a bank that was inconvenient to me and I purposefully did NOT have an ATM card for that account... each payday I would walk over to that bank and deposit my savings for that paycheck. Awkward, but it worked.
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Old 01-22-2016, 01:43 PM   #31
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Yep, read "The Richest Man in Babylon" when I was 22, and the message stuck! But it was pretty hard at first...I would have had to stop eating in order to save the 10% they advised.
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I think the most valuable thing I learned in my mid-twenties was "pay yourself first". I put my savings on auto-pilot and then whatever was left and hit my bank account was available to be spent.

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