A few short years ago, a $6,300 furnace fiasco would have left me wanting to bury my head even deeper into the sand. How do I know this? Flashback to January 1, 2017, when we started our journey to dig out of $55,749.69 worth of debt. That nasty number didn’t reach that level with proactive, positive behavior. It came from years of denial, and most of all, not having a plan in place to do something about it. While this week’s visit from Murphy was unwelcome, ours was the wrong door on which to knock. A financial setback won’t make us quit!
One of the benefits of blogging about our journey is that it gives me the opportunity to look back at how we’ve reacted when things haven’t gone our way. Looking back, I can see that there have been times we needed to make changes. A prime example is Hub’s needing a month off for a hernia repair. We reacted to that setback by adding more short-term disability when open enrollment came around again. Although we are paying for it, knowing we would now have 60% of his income coming in rather than a measly $200 a week, we do sleep better at night.
A more recent post I looked back at was one I wrote last November. At that time, we had decided to beef up our emergency fund by another $5,000. The very reason was to avoid going into debt should something like this unexpected furnace expense happen. Unfortunately, since we were going to build that up over time, we weren’t even close to the $5,000 mark. So how are we changing things up? I’m going to call it our hybrid approach-a mix of paying off debt while increasing our savings.
Although we were already taking a bit of a hybrid approach with our finances, our emphasis had been more on the debt than our savings. Now, until we reach that additional $5,000 in savings, savings will become our new focus. My hunch is that it won’t take us all that long to reach this level, I’m guesstimating 3-4 months. No matter what though, paying off our debt to Citi will happen before the 0% interest rate expires, even if it means dipping into our savings.
As for the mix. Since I still need to feel we are making a dent in our debt, we are allocating $75/week to Citi, $200/month to our Visa, and $100/monthto the new furnace debt (although this amount may change depending on the minimum). The balance will go for our savings.
Will things change in the future? Very likely they will. That is the beautiful thing about personal finance. It is personal, and adjustments can be made as deemed necessary. While this new furnace has set us back, we still won’t quit!
True and beautiful words: “That is the thing about personal finance. It’s personal . . ..”
Yeah, I think you’ll reach the 5k savings in no time with your brand of focus.
Priscilla Bettis recently posted…Creating an Author Platform
Thanks. I know we will!
I totally agree, personal finance is PERSONAL.
It sounds like you will get out of the debt soon anyway and if focusing on savings will make you feel more secure, you should definitely go for it! 🙂
Thanks, Sharon. I think it will give us the needed feeling of security. No matter what, we are still bound and determined to break the shackles of debt before the end of the year.
I completely understand where you’re coming from. That’s how I felt about the medical bill we incurred last year. Luckily, because we’ve been developing new habits, it turned out that it didn’t rock our world too hard.
We are working on bolstering savings, too. With all this talk of a possible recession, I’d like to have more cash socked away.
You’re doing great!
The $76K Project recently posted…21 Months Later, My Student Loan Is GONE
Financial emergencies sure can play a number with our security glands. I cannot wait until life can be more about savings than paying off debt! We will both get there!
We are going to try to do the same thing – pay off debt while still putting money away for sinking funds. I just have to stop stealing from that category for other things!!!! We are going to attempt a no-spend February – we’ll see how much we can save doing that and it will go directly into the sinking fund.
After what we’ve experienced, I think it makes sense, but then again, I’m a broke person so probably not the best person to give advice! I’d like to hear more about your no-spend February!
It’s such a hard call to make – with something like this, $1000 isn’t nearly enough to pay for the emergency so what do you do? I do agree keeping money in savings when you are in debt is probably not the best idea, but I think for my own peace of mind, having enough in there to weather a storm like you have just had, will give me more peace of mind. We are firming up the “rules” of the no-spend February – mainly it is ok to pay all the bills (duh), we have TONS of food, so will only put about $30 aside for milk, bread, etc. for the month, and we will get our usual personal money of $40 each payday to do with what we want. Anything left in the categories at the end of the month will be split between the sinking funds and the Home Depot card.
That’s one of the biggest challenges of this journey. How do you get through these types of emergencies? With your no-spend February, you’ll be saving a lot of money!
No truer words said. For me, working the snowball as Dave Ramsey prescribes is working, however, after this month, one of the debts is floating up higher than the BofA cards. BUT they are all comparable in amount. We will see what happens after the Chase-Slate is paid off. But I am still determined to pay off the 3 cards. Done and done.
I commend you for sticking with Dave’s plan the way you have. At some point, we may lessen our grip on our emergency fund, but for now, we feel the need to keep what we have in place, plus increase it. The key is to keep going, no matter what life throws us!