Day 31: It's Going To Rain
by Edward Smith
05 Aug 2020
Storms Are Scary, but Planning Can Keep You Safe
On 22 July, 2020, we had a really serious thunderstorm hit our side of town. Our city has an automatic system that warns us in advance electronically. When something catastrophic, like a flood happens, the system attempts to alert us and keep us safe. It doesn't always work, because we don't always listen.
The problem with the warning system, is we hear from it so often, that many of us have become complacent. We ignore it. We don't see the danger, so we start taking unnecessary risks. It's not smart. It's stupid.
I bring this up, because when the storm warning hit, I was thinking about driving to the store for some groceries. The weather over the last several weeks has contained intermittent rain with an occasional thunder storm off in the distance.
Not visually dangerous, but nothing worth freaking out about. I looked outside, I saw a few clouds, I didn't see a storm. No big deal.
False alarm. Except it wasn't.
Overconfidence Kills: Storms Can Hit Fast
Within one hour, things went very very wrong. This storm was a flash lightning storm and it came out of no where. The wind came in at us sideways. When it hit, the windows began popping and groaning from the pressure. The whole house shook. The lightning was dramatic and severe.
It was right on top of us. When it struck, the force would rattle the walls. The floor would buckle The sound was deafening. This storm was the real deal. The kind of storm that can kill you if you're outside.
Luckily I wasn't outside. I had decided to stay put for a second. When I went to set up dinner, I noticed we had enough food around to make a meal. I didn't need to leave the house for anything. I was okay.
Good planning, turns a potential disaster into an inconvenience. It buys you safety. It gives you breathing room. Plans are awesome. Emergency Funds are a plan. They work. Have one.
Emergency Funds
Everyone should have an emergency fund of at least three to six months worth of their normal household expenses. This is cash money you save in your bank account ahead of time before a crisis occurs.
When things go wrong, you won't have time to do anything then. That's why you want to do this ahead of time. The more risky your household's situation, the bigger your emergency fund. This money is your shield. It deflects things. It buys you some time.
This money needs to be easy to get to, but it should also be kept separate from the rest of your house. This is money, you never touch unless an actual emergency forces your hand.
What Emergency Funds Can Be Used For
Emergency funds are meant for the really big nasty things that come up that can really wreck your life if not addressed.
For instance, many people use an emergency fund to offset a job loss. If you lost your job today, your income would likely drop to zero. If that happened, could you still cover your basic living expenses? For how long? Emergency funds keep you going when your income fails.
The emergency fund steps in when life smacks you down, and you can't do things alone. It's your back up. In the case of a job loss, it keeps paying you like you didn't lose your job.
You get some breathing room.
You get a moment to lick your wounds. You get to look for a different job. Your house survives. One less thing to worry about. You get a second chance.
Emergency funds can also be used when a critical component of your life breaks down. For instance, if you rely on a car to get to your job, and that car stops working, it's okay. The emergency fund has your back. You can fix the car, and continue working. The emergency still happened, but the crisis embedded in that thing was averted.
Disclaimer: The emergency fund is there for your use. Make sure you only use it during an emergency, and always pay your emergency fund back after things return back to normal. More emergencies are on their way. Be prepared. Reestablish your defensive line. Quick! Before the zombies come back!
What Emergency Funds Shouldn't Be Used For
This doesn't mean you use your emergency fund to buy a car because walking is inconvenient. If you can walk, walk. If you can ride the bus, ride the bus. Big ticket wants are something you save up for. They can take time, but you have time.
Not planning for a pair of shoes when you have a party to go to, is not an emergency. Wanting to go out to eat because you're tired of cooking is not an emergency. Emergencies are always serious. If your thing isn't serious, then it's not an emergency.
Your emergency fund is your last ditch effort to prevent a tremendously bad outcome. It's the difference between your future's life and death. Treat it with respect. Leave it alone. Let it come to your rescue. Hopefully you'll never need it, but make sure it's there in case you do.
Conclusion
In this article, I advised you to set up an emergency fund. Emergency funds should be large enough to cover three to six months worth of your household expenses. You should be able to get to them quickly. They can be used to buy yourself extra time during a job loss, and they can be used to replace critical things when those things break down.
Emergency funds are not for fun, and they do not work if you don't have one in place. Create an emergency fund today. Protect yourself.
Scary things are coming. Are you prepared to weather the storm?
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