According to bankrate.com, it's beneficial to "have an emergency fund of three to nine months' worth of expenses." For us, this means about $10,000. While we don't usually have quite that much, we had saved up about $4000. However, a series of unfortunate events drained our emergency fund in less than two weeks.
Our dog has always had bad arthritis. However, it had gotten so bad she had several fractures in her leg and her muscle had atrophied. Since her leg was basically useless and she was in pain, we were advised by two different vets to amputate her leg. This procedure (along with blood work and an x-ray) cost us close to $3000. Since we no longer have to purchase arthritis and pain medicine, the amputation will actually save us money in the long run.
My husband noticed an odd smell coming from my car. We took it in and learned my car was leaking coolant. Our mechanic fixed the problem for $300. Luckily, since we caught the problem, we prevented further damage to our engine. I also got an oil change and tire rotation for an additional $40. I feel fortunate to have a car with over 100,000 miles on it. It is already paid off so we are happy that it is still in good condition.
The other morning I walked out into the kitchen and heard a squishing sound. Then, I noticed water seeping out from under the kitchen cabinet. Luckily, we have a home warranty. A plumber came out within the hour. He had to slice through some drywall but found the leak. We were thankful it wasn't a slab leak which would have cost us a lot of money. The leak was fixed and our drain was unclogged also. Due to our coverage, we only had to pay $145. Our warranty service is even going to patch up the drywall. I can't imagine how much an emergency plumbing call might have cost if we didn't have a home warranty.
Replenishing our Account
Luckily, due to our tax return and my husband's coaching stipend, our emergency fund will soon be replenished. In the same Bank Rate article, Gail Cunningham, spokeswoman for the National Foundation for Credit Counseling in Washington, D.C, recommended to start an emergency account "by saving $100 per month or 10 percent from each paycheck." Since our account is almost gone, we may have to save $200 a month for us to be prepared for the next emergency.
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