Saturday, February 12, 2011

Budget isnt a bad word part 2

Last week I discussed how it was before I went to the Financial Peace University class, this week I would like to discuss how it has helped us to have an emergency fund and Car repair fund, and ways it has helped us with the rest of our budgeting.

Dave Ramsey suggests you start with $1000 in an account that you can easily get to (but not too easy) for an emergency fund. If you have debt you are to make minimum payments on these until your $1000 emergency fund is in place.

An emergency fund is just that for emergencies, things like a death in the family and you have unexpected traveling, get laid off from work. Christmas is not an emergency, neither is that new outfit you have been wanting that went on a drastic sale.

When we put our $1000 into the account we did not want to have to touch it. So we kept it in there even when things came up that seemed like emergencies. One time our car broke down and we did not yet have enough in our car repair fund to fix it (more on car repair funds later) and so we decided since we had two cars we would just wait until we had the extra money in our car repair fund. We were patient and when it was time we got the car fixed.

You could argue that needing a car fixed was an emergency, but we did not want to pull from that account if possible so we waited.

Car repair Fund:
In Financial Peace University Dave Ramsey talks about having a car repair fund. This is for things like oil changes and other normal repairs. We did not have a car repair fund really, yet we were taking in one of our two cars in for a repair about every 3 months. Both of our cars have high millage and are older cars with quiet a few miles on them so we expect repairs need to be done on a regular basis.

This is how our car repair fun works for us. We set aside $100 a month for car repairs, taxes, ect. if we do not use the money that month it stays in the envelope. It amazes me that as I think we are getting quiet a bit of money in there something always comes up. But it is no longer an emergency. It turns into an inconvenience. It is inconvenient to take our car to the shop and use only one car. It is a blessing that we do not have to stress over little repairs.

It is amazing to me that we did not have this in place before, we have always had repairs that needed to be made on cars, yet it was not budgeted in our budget it was always an emergency. Not anymore! Thanks to our Car repair Fund Car repairs are not an emergency for us anymore.

The emergency fund and car repair fund bring a peace when it comes to the rest of the budget. Knowing that we have those there really help when I think we are extra low on money that month at least I know we are taken care of in a real emergency.

So I encourage you to reevaluate your budget and set aside some time to figure our how you can get an emergency fund and car repair fund going for you!

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