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One of those days
Old 01-25-2007, 12:24 PM   #1
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One of those days

Warning Rant Ahead

Well yesterday the DW had the furance looked at and it needs to be replaced in the next year (we have some hairline cracks in some pipes). So more of my money is going to fixing things than saving for ER.

This just seems to keep happening to me lately and it is driving me a bit NUTS!

Any ideas on how to top up the Emergancy Fund after a withdrawl and still keep working to ER?

Thanks,
CF
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Re: One of those days
Old 01-25-2007, 01:05 PM   #2
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Re: One of those days

Well... you could get another job... which is totally overrated. Or you could look to squeeze other expenses somewhere else to compensate for your furnace outlay.

Expenses like your furnace are never any fun, but they show up anyway. But that's what your emergency fund is for, right? Unless you are like me and despise tapping into the ER fund because that just means you have to replenish it. It's a vicious circle in which there is no escape...
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Re: One of those days
Old 01-25-2007, 01:44 PM   #3
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Re: One of those days

Quote:
Originally Posted by Canadian FIRE
Any ideas on how to top up the Emergancy Fund after a withdrawl and still keep working to ER?
Can you change the rules?

Most people go with the conventional wisdom of 3-6 month's salary. But if you're laid off, would you really keep spending at your old employed rate? And what the heck do expenses have to do with a salary anyway?

So maybe you could whittle the Emergency Fund requirements down to the bare bones of mortgage, groceries, & utilities. And maybe you'd pay the last month of the mortgage on a credit card anyway before taking a part-time Wal-Mart apron.
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Re: One of those days
Old 01-25-2007, 01:56 PM   #4
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Re: One of those days

The emergency repairs seem to come in cycles; everything grouped together, giving you the sense that nothing is working and that despite all the budgeting there is an unplanned hoover sound taking it all away.

But, when you look back over time, they cycles are always there, just the timing and focus changes. That said, having the flexibility to put some $$ in an emergnecy fund is a basic part of the budget. If crises slow and and you top off the emergency stash, you can take that same "payment" and put it into other savings - money market or toward prepaying the mortage. That gives you flexiblity to have funds for emergencies while not letting that "emergency funding payment" become lost in the routine expenses.
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Re: One of those days
Old 01-25-2007, 02:05 PM   #5
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Re: One of those days

I got some guide from my mortgage company that suggested how much a house costs in "incidental expenses" each year. I have done about $13,000 in updates the past 4 years, so I feel your pain.

My solution came from my taxes......... I usually have a lot of exemptions I take, plus DW does her deductions so her employer takes MORE out for taxes. I have done my own taxes for 20 years, and we give significantly on cash and noncash contributions to charities.

Bottom line, I get about $3-$4000 a year back from the IRS. I realize many would scoff at this............about giving the govt a "tax-free loan", etc., but it has worked well. When we had CC debt, we took the "windfall" and made a large lump sum payment to it. When we bought the house, I take the refund and put it into the "house account", where it sits until the inevitable happens...........that way I never miss the moeny or feel guilty when I spend it.

And, more importantly, I don't touch the true "emergency fund", where we have 12 months of full expenses safely stored in a MM account...........
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Re: One of those days
Old 01-25-2007, 02:13 PM   #6
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Re: One of those days

Quote:
Originally Posted by Canadian FIRE
Warning Rant Ahead

Well yesterday the DW had the furance looked at and it needs to be replaced in the next year
Didn't the Harper governmnent just announce grants of up to $5K to make your home more energy efficient? Now's your chance to benefit.
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Re: One of those days
Old 01-26-2007, 12:46 PM   #7
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Re: One of those days

Yes the feds introduced a new program. The problem is that it doesn't kick in until April and I have to foot a $300 inspection bill to even get started at getting some money, but that did give me an idea to check out funding for the wife's daycare. Perhaps I can get something sooner.

Quote:
Originally Posted by Sandy
The emergency repairs seem to come in cycles; everything grouped together, giving you the sense that nothing is working and that despite all the budgeting there is an unplanned hoover sound taking it all away.
Now that you mention it, I think your right. This comes in cycles. I had this problem about 2 years ago now. Thanks, I feel a bit better with that.

Nords - The E fund is already down to bare bones. I never like having that much cash sitting around at 3.5%.

Anyways, thanks for the ideas and listening to the rant if nothing else.

Have a good weekend,
CF
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Re: One of those days
Old 01-26-2007, 05:48 PM   #8
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Re: One of those days

Quote:
Originally Posted by Canadian FIRE
Nords - The E fund is already down to bare bones. I never like having that much cash sitting around at 3.5%.
CF
Based on recent experience, maybe you DO need "that much" cash at 3.5%!
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Re: One of those days
Old 01-26-2007, 06:19 PM   #9
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Re: One of those days

a) if you have hairline cracks in your heat exchanger and arent replacing the unit asap, get a carbon monoxide detector. Even if you dont have a flakey furnace, get a carbon monoxide detector.

b) this is a good example of why you should incorporate future capital spending into your budget when planning.

c) find a better cash option than 3.5%. I realize some of the non-canadian options arent going to work for you, but jeez louise, 6% should be doable for something with a little cash-out penalty and 5% on a money market should be doable. If the lead weight cash is really bugging you, slightly bump up your equity holdings to lift your long term returns a little while using the cash as ballast for this stuff and other speedbumps.
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