393. When Everything Breaks at Once: Why Your Emergency Fund Matters

Get our free Simplify My Money newsletter and start taking control of your finances: https://www.debtfreedad.com/newsletters/simplify-my-money

What actually counts as an emergency?

In this solo episode, Amber shares how a crushed air conditioner, trailer repairs, a roof leak, a broken washing machine, and an unexpected vet bill all hit within a matter of months.

She breaks down the difference between a true emergency and an expense you should be planning for, why emergency funds are about more than money, and how to rebuild your savings after life drains it.

If you've ever wondered whether an expense belongs in your emergency fund, this episode is for you.

Support the show

The Totally Awesome Debt Freedom Planner https://www.debtfreedad.com/planner 

Connect With Brad 

Website- https://www.debtfreedad.com
Facebook - https://www.facebook.com/thedebtfreedad
Private Facebook Group - https://www.facebook.com/groups/debtfreedad
Instagram - https://www.instagram.com/debtfreedad/
TikTok - https://www.tiktok.com/@debt_free_dad
YouTube - https://www.youtube.com/@bradnelson-debtfreedad2751/featured 

Thanks For Listening 

Like what you hear? Please, subscribe on the platform you listen to most: Apple Podcasts, iHeartRadio, Spotify, Tune-In, Stitcher, YouTube Music, YouTube 

We LOVE feedback, and also helps us grow our podcast! Please leave us an honest review in Apple Podcasts, we read every single one. 

Is there someone that you think would benefit from the Debt Free Dad podcast? Please, share this episode with them on your favorite social network! 

Episode Transcript

Amber (00:00):
Have you ever had one of those time frames where
everything decided to break atthe same time?
Like just a span of a fewmonths where everything just
went in your life.
The air conditioner, the campertrailer, the roof, the washing
machine.
Even surprise vet bill.
After our dog Augie got into afight with another dog.
And while I definitely wasn'texcited about any of these

(00:24):
expenses, it reminded me whyemergency funds matter so much.
Because life really doesn'twait until it's convenient.
And sometimes the differencebetween a stressful situation
and a financial disaster issimply having money set aside
before you even need it.
Hi, I'm Amber, today's host forthe Debt Free Dad podcast,

(01:28):
where we help normal, everydaypeople like you take control of
your finances so that you canlive a happier, less stressful
life.
Now, my husband and I paid off$54,000 in debt in just 20
months and have been livingdebt-free outside of our
mortgage since 2018.
After listening to today'sepisode, if you're ready to stop
living paycheck to paycheck,reduce financial stress, build

(01:52):
your savings, and finally payoff your debt for good, we've
got an incredible free resourcethat I'll be sharing later on in
the show.
Now, let's start with thequestion that inspired this
entire episode.
What actually counts as anemergency?
Because I think a lot of peoplestruggle with this.
And just because something isunexpected doesn't actually

(02:16):
automatically make it anemergency.
And just because something isexpensive doesn't automatically
mean that it's coming out of theemergency fund.
For me, an emergency usuallymeans something I didn't see
coming, needs to be dealt with,and can't really be put off.
So let's look at a few examplesfrom my own experience just in

(02:36):
the last few months.
So this winter, about 200pounds of ice came crashing down
onto our air conditioner.
And we had to wait until springto deal with it because of all
the snow.
But I can honestly say I wasnot planning that one.
Um, thankfully, insurancecovered most of it, but we still
had that $500 deductible, andthat's an emergency.

(02:58):
Nobody plans for a giant chunkof ice to destroy their air
conditioner.
Then there was the campertrailer.
When we opened it for theseason, we discovered electrical
and plumbing issues that neededrepair.
Now, maintenance is part ofowning a trailer.
Things wear out, but we weren'texpecting a $650 repair bill

(03:22):
before we could even enjoy ourfirst weekend.
That's another situation whereusing the emergency fund made
sense.
Then we had our roof leak.
Thankfully, the roofing companystood behind their work because
we just had it installed fiveyears ago or just under five
years ago.
Um, so they covered that undera workmanship warranty.

(03:45):
Now they fixed the roof itself,but we still have to repair
some drywall inside that gotdamaged from the leak.
Now, again, not something weplanned for, not something we
could ignore.
And it came out of theemergency fund.
Now, I'm telling you, when lifehappens, and I know you know
this, when life happens, man,does it happen?

(04:07):
So, not only that, we also hadour washing machine that kind of
went kaput.
Now, I did try and repair it umabout six months prior, and it
worked for a little while, andwe had started to save for it,
but we didn't quite have enoughto pay for the whole thing, so
we had to dip into thatemergency fund.

(04:28):
But here's the thing appliancesand stuff wear out.
Now, did I think my washershould have lasted more than
eight years?
Yeah.
But we dipped into ouremergency fund a little bit for
that, and we used what we hadalready saved because we knew it
was coming by then when I hadto repair it.

(04:49):
So we did find ourselvesfinding a not crazy expensive
one and we replaced it withthat.
But for the first few weeks, wewere going to um the laundromat
because I wasn't willing tojust jump in and just go buy the
first washer that I seen.
I wanted to shop around, Iwanted to find a good deal, and

(05:10):
it wasn't like a dire need tohave a washing machine.
I had other options, right?
So, I mean, again, it'sreasonable for the emergency
fund, but you gotta be preparedfor knowing that things will
break down, right?
Appliances do break, cars dobreak down, tires wear out,
right?
Tires not necessarily anemergency.

(05:30):
Like we know these things aregonna wear out.
So it's a gray line, like it'sa fine line.
You're kind of riding the linethere with that one.
And then there was Augie, ourdog.
So um, if you've been listeningto me before, you know my dogs
are family.
And this spring, Augie got intoa fight with another dog and
needed veterinary care.

(05:52):
So when something happens toyour pet, you don't want to be
sitting around debating likewhether it's a good month
financially to be able to getthem the proper care that they
need.
So I could not predict thatAugie would get into a fight.
I knew, you know, he's gonnaneed a veterinary care.

(06:12):
Like we bring him in for hisnormal shots, we plan for that,
we bring him in for hischeck-ins, we plan for that.
But at this point, we couldn'tknow.
We could not predict thatspecific incident, right?
So that was an emergency.
That needed the emergency fund.
Now let's flip to what's not anemergency.

(06:34):
Um, because this is where Ithink a lot of people actually
use their emergency fund forthings that they probably should
have planned a little betterfor.
So, like I mentioned earlier,tires, right?
Your vehicle is going to needtires every so often.
You don't know exactly quitewhen.
It all depends on how muchyou're driving and all of that.

(06:56):
There's a lot of things, butyou know tires are going to be a
thing.
So that's more of a maintenancething, right?
And the same thing goes foryour brakes on a car or an oil
change.
Those are maintenance things.
So you want to have a fund formaintenance, but you want to
have a fund for emergency funds,right?
You need something foremergencies, you need something

(07:17):
for maintenance.
It's really good practice tohave those all set aside and
planned for.
Now, the vehicle things areexpected costs, right?
When it comes to vehicleownership.
The same goes for appliances.
And I know we kind of I dippedinto my emergency fund because I
wasn't quite saved up enoughfor the new washer that I kind

(07:38):
of knew was coming based on thefact that I had to like replace
a part and use YouTube and allthe things.
If your fridge is 15 years oldand it sounds like it's
preparing to like take off everytime that it turns on, you
might want to start saving forreplacement.
And I feel like that comes intoaccount with your home.
Like if you own a home or ifyou own appliances, whatever

(08:00):
that looks like, you want to besaving for maintenance on your
home, saving for maintenance onyour car.
So I think it's reallyimportant to have maintenance
funds and then also emergencyfunds and to know the difference
between the two.
Now, a routine pet expenseisn't an emergency.
Vaccinations, annual exams,flea and tick prevention,

(08:24):
routine medications, those arenot emergencies.
Those are predictable, thosecan be added into your budget
and they should be worked inevery single month.
And I know for us, like we'renot paying those every single
month, and you probably aren'teither, but you want to at least
work it out.
Like the best way to do that, Ifind, is um get the full

(08:46):
picture, the full price of whatyou expect for the year, divide
it by 12, and just put it awayevery single month.
Now, one of the things I'venoticed as we've gotten better
with money is that fewer thingsfeel like emergencies.
Years ago, almost everythingfelt like a crisis.
Car repairs, vet bills, homerepairs, every unexpected

(09:08):
expense felt stressful becausewe didn't have a plan for it.
Today we still have thoseunexpected expenses, but we know
we clearly see we have a plan.
But many of the predictableones have their own savings
category as well.
So we save for vehiclemaintenance, we save for pet

(09:28):
expenses, we save for homerepairs, we save for the things
we know eventually are going tocome up.
And when we have emergencieslike we did back to back to
back, you know, a lot of times Ican shift and maneuver my
budget to avoid using theemergency fund.
And I know that once peoplereally get into this and they
hone in their budget, theyprotect that emergency fund like

(09:52):
it's their business.
Like it's important to them.
The goal isn't to predict everysingle expense that life throws
at you.
The goal is to reduce thenumber of surprises.
So let's talk about whathappens after you've used your
emergency fund.
Because for us, after all ofthese things piled up the last

(10:13):
few months, our emergency fundis looking pretty darn bleak.
Um, so this is where a lot ofpeople will get discouraged,
right?
You've saved up your emergencyfund for the very first time.
You're you're excited, you haveit, yay! But then when you have
to use it, it freaking sucks.
And sometimes you'll even feellike you failed because you had

(10:37):
to use that emergency fund.
But I mean, think about it.
Your emergency fund didn'tfail.
It did exactly what it wassupposed to do.
Without ours, the deductible,the trailer repairs, the drywall
repair, the washing machines,the vet bill, these all happen
within a few months.
That easily would have ended upon a credit card.

(10:58):
Instead, we were able to paycash.
That is a win.
That is definitely a win.
Now we need to rebuild, right?
When you use your emergencyfund, you need to rebuild it for
the next emergency becausethey're gonna happen.
It's it's life.
So if your emergency fund takesa hit like ours did, one option

(11:21):
is to temporarily pause extradebt payoffs if you're still
paying off debt, not for good,you know, pay your minimums and
then really focus on thatemergency fund, then go back to
paying extra on debt, just longenough to rebuild that safety
net, that emergency fund.
Um, another option is totemporarily reduce other savings

(11:43):
goals.
And this is where we shiftedbecause we don't have any debt.
We shifted our savings goals.
So maybe you're putting extramoney towards vacations, maybe
you're investing a little moreaggressively, maybe you're
saving for a fun project.
You can always increase thosecontributions again later, but
rebuilding your emergency fundgives you stability.

(12:05):
And don't focus on rebuildingthe whole thing overnight, focus
on milestones.
Get back to your first $1,000,then one month of expenses, then
three months of expenses, evensix months of expenses.
Small wins create momentum.
So the biggest lesson from allof this is that the goal isn't

(12:29):
to never use your emergencyfund, the goal is to have one
when you need it.
This spring alone, we've dealtwith a crushed air conditioner,
the trailer repair, the roofleak, a washing machine
unexpectedly dying.
Well, kind of unexpectedly.
That's a gray area.

(12:49):
And the dog fight that resultedin a vet bill.
None of it was fun, none of itwas planned, but none of it
became debt.
And that's the real win.
And here's another win is thestress that didn't go along with
it.
Of course, there was normal,you know, stress, like, oh, I

(13:10):
can't believe this happened.
Oh, I can't believe thishappened.
But we weren't like, oh mygosh, how the heck are we gonna
pay our bills this month?
Or how the heck are we gonnaput food on the table this
month?
None of that was on our mindswhatsoever.
We had the emergency fund, wehad that financial piece.
Um, it wasn't about, you know,avoiding emergencies.

(13:31):
It was about having that planwhen those emergencies showed
up, right?
So, as I mentioned at thebeginning of today's episode, if
you're ready to stop livingpaycheck to paycheck, lower your
stress, build savings, andfinally crush your debt for
good, you're in the right place.
Every Sunday, we send out ourfree newsletter, Simplify My

(13:53):
Money.
It's packed with practical tipsand simple strategies to help
you make progress with yourfinances.
You can sign up today byclicking the link at the top of
the show notes.
Thanks for listening, and we'llsee you on the next episode.

Announcer (14:14):
Thanks for listening to the Debt Free Dad podcast.
Connect with us on Facebook,TikTok, YouTube, and Instagram.
Just search Debt Free Dad.
If you found value in today'sepisode, please leave us a
rating and review.
We so appreciate it.
For resources, show notes, andlinks mentioned in today's show,
visit debtfreedad.com.

(14:35):
Catch you next week.