My $1,000 Day – Or Why Everyone Needs an Emergency Fund

by Sophia Bera on September 25, 2013

Sometimes, people ask me why they need an emergency fund.  In the past, I’ve come up with reasons like a car repair, medical emergency, or job loss, but often when we are speaking in hypotheticals it’s easy for people to ignore the advice.  Trying to save 3-6 months of one’s salary sounds like such a big number that many people don’t start, but even $1,000 or $2,000 in the bank can make a big difference when an unexpected event comes your way.  Sometimes, if you’re like me, you’ll have two emergencies in one day!

Welcome to my world…

On Wednesday, my renter called me because the refrigerator wasn’t cooling.  I called a repairperson for $95 to go out and assessed the situation.  Then he called me to let me know it was going to cost $725 to repair the fridge!  Yikes!  (He told me what was wrong with it, but all I heard was this).  So we went in search of a new one. While we were on our way to the appliance store our tenant texted me that the drain had backed up in the basement.  I texted back some choice words and called Roto-Rooter.  Luckily, they were able to come out and fix the situation an hour later for the price of $293.

Simultaneously, we found a nice refrigerator that was last year’s model for $529 plus $69 for delivery.  I asked if that was the best price he could give me and he dropped it to $499 plus $50 for delivery.  (Lesson learned: it pays to ask if that’s the lowest price because you never know until you ask.)  We saved $49 and he made a sale in 10 minutes.  It was a win-win.  We also bought a five-year extended warranty for $99.  After taxes, the grand total was $692, which was cheaper than repairing the old lemon of a fridge from 2005!  (We had already dumped $300 into the old fridge just over a year ago and we’re excited to have a more reliable appliance.)

It Adds Up Quickly!

All together we spent $1,080 on our rental property in one day! (Plus $20 to go see “We Are the Millers” to drown our sorrows.  It was worth it just to laugh for two hours!)  We really didn’t plan on spending over $1,000 in one day, and there are plenty of things we would have rather done with the money, however, we were really glad to have the savings set aside.  This reminded me again why it’s so important to have an emergency fund: because it turns “emergencies” into “minor inconveniences.”