The Flat Tire Fund

So there you are, cruising along in your car, minding your own business when...pop-pop...the construction zone you're in leaves you with two flat tires. Or your water heater goes out. Or an unexpected doctor's visit is required. What happens next? 

Now I know many of you reading this are thinking, 'I would buy the tires and move on with my life. What do you mean what happens next?' However, that response isn't necessarily going to be the norm. In fact, in an article published by MSN, roughly 54 percent of people indicated that they would not have the ability to pay for a $400 unexpected expense. So, they end up putting it on a credit card and paying it (and a pile of interest) off over time, borrowing from friends or family, or worse, not take care of the issue at all. 

Ok, we've acknowledged that the lack of savings is a real thing but what can really be done about it? What does it actually take to have that $400 saved? There are lots of ways to break down the math of it but it shakes out to $8/week over the course of a year. Doesn't sound as daunting now, does it? I would easily argue that $400 isn't enough though. Dave Ramsey, one of the most recognized names in the realm of finance and budgeting, recommends an initial emergency fund of $1000 before attacking one's debt. Really I think it comes down to your individual situation as far as defining 'enough' when it comes to an emergency fund. But, no matter what that number is, do what it takes to get there. Maybe it's as easy as taking your lunch to work every day instead of eating out, or skipping the overpriced coffee chain, or paying with cash and tossing the change into a jar on your nightstand. Find a method that works for you and your family and stick to it. That way, when something happens you can be the one to say no big deal, I've got this.

What happens when a financial emergency occurs in your life? How have you prepared for the unexpected expenses that are an inevitable part of our lives? Take a minute to reflect on that but also on how we can position ourselves to be able to help those around us who end up in these situations.

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Jefferson