Why You Need an Emergency Fund

Imagine it’s 2:58 am, on a nice cold night. You’re snuggled up under your covers sleeping soundly, when all of the sudden there’s a knock at the door. You’re now somewhere between full REM cycle and awake. So you start thinking as logically as you can and come up with 3 scenarios all with the same outcome.

  1. You’re hearing things. Go back to bed.
  2. There are neighborhood kids ding dong ditching you. Go back to bed.
  3. There are people in masks at your door ready to purge you. Better to be killed while you’re asleep, go to sleep. (I’ve seen the movie.)

After thoroughly weighing the options you’re not sure you heard anything at all so you try to go back to sleep.

There it is again.

So you make your way to the door peep through the window, you see two police officers. You’re relieved not to see anyone in a mask, meaning you’re not going to be purged, but, now your mind is racing trying to figure out why they’re here. WHAT DO THEY KNOW!?

You realize that they probably don’t care that you rolled that stop sign by your house on the way home and decide to open the door. (Only partially because you’re in your skivvies though.)  This conversation ensues.

Zombie (me) “What can I do for you officer?”

BPD “Are you So-and-So?”

Z “Yes”

BPD “Do you live at 123 BlogStreet?”

At this point you wonder if you’re in an episode of the twilight zone.

Z “Yes”

BPD “ Do you know where your car is?”

Z “Is it not in my garage?”

BPD “No sir, it’s down the street on fire.”

Now you’re sure of it. You’re on an episode of punked. You look around for the cameras. Unfortunately, you don’t find any.

At this point you ask the officers into your house because you know it’s going to be a while.

I’m sure you’re thinking, “Man, sure does suck to be that guy!” I’m just over here thinking, “Welp, now that it’s over it’s really funny.”

Apparently, our friendly city arsonist decided that he wanted to take our lovely 2010 Subaru Outback (and Ellie’s car seat) that we had spent 4 months looking for, and owned for 6 months, out for a joyride/bonfire.

It’s ok though, we had car and homeowners insurance.

Right?

Wrong.

Turns out liability insurance only helps the person you hit. (The Arsonist’s insurance also doesn’t cover anything, didn’t stop us from asking though).

If he would have lit our car on fire inside our garage and damaged the house we would have been able to make a claim under the homeowners insurance, but he was kind enough to drive 3 blocks away first.

So we were left with a perfectly running Subaru with a charred interior.

 

Fortunately, one of my friends had recently given my number to a financial planner, a persistent cuss, who told us that we couldn’t count an investment account as an emergency fund. (Something I knew, but because I had a finance degree I had rationalized we didn’t need that money sitting there doing nothing.)

So, doing what we knew we should have done from the git-go we put the left over money from selling the Malibu and buying a beautiful 1999 F150 with a custom patina paintjob into a small emergency fund. Which really took a lot of the stress out of the situation. It also enabled us to shop for another car without having to sell the one we had first. It seems that we may have inadvertently disproved Dave Ramsey’s “An emergency fund is Murphy repellent.” theory.

Our first thought was to just fix it, but after numerous quotes and advice that we likely wouldn’t be able to ever get all of the smoke smell out. We decided to cut our losses. I posted it to Craigslist and sold it for $4,000 a cool $5,500 under BlueBook.

Later that week our washing machine started depositing large chunks of plastic in with the clothes. I had picked up the washer for free four months earlier not working and fixed it so really there’s not a lot of loss, but when it rains it seems to pour.

After about a month of thinking about fixing things we determined that buying a washing machine could be an emergency fund purchase. We also opted to take 12months interest free on the purchase of the washing machine, that Synchrony bank took the privilege of drafting the next month…

Lessons Learned

Shut your garage door

  1. Keep vehicle keys in house/shut garage doors.
  2. Always have an emergency fund.
  3. Never finance something you can pay for with cash/Listen to your wife.

 

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