THIS is why you need an emergency fund.

Miss Thrifty16 March 13, 2014

why i need an emergency fund


The first thing to go wrong was the washing machine. I couldn’t do any laundry: every time I turned on the washing machine, the fuses tripped. My husband is a skilled manual labourer and my toddler is potty training, so it doesn’t take long for our laundry basket to turn into a grotty laundry tower. Google said there could be a problem with the machine’s pump.

“Leave it with me,” I said to my husband. “I’ll get us a sweet deal on a new washing machine.”

I said this because I was having a little daydream about sussing out the craziest good-value-for-money washing machine in the sales, then haggling for a further discount. The other day, in a naice department store in Harrogate, I got an additional 15% off a reduced-price polka dot dress, just by asking. Haggler with a swagger.

My husband gave me a withering look.

“We aren’t going to buy a new machine. We are going to replace the broken part.”

Our local washing machine repairman said he would come and take a look. My husband arrived home from work early to let him in.

The house reeked of gas.

The gas people came out, traced the gas leak to the hobs in the kitchen, slapped this lovely triangle sign (above) on our cooker and toodled off again.

The washing machine repairman came out, tinkered with the machine for a while – and then announced that the motor had blown, and that we were best off buying a new machine. In memorium, Indesit model WIA111 (2007 – 2014). You gave us your all.

So I arrived home from work to find the washing machine declared dead, Northern Gas Networks notices hung up in the kitchen, and the hobs disconnected.

And do you know what? I FELT FINE.

And not just because the washing machine repairman only charged £30 for the callout (good old Yorkshire prices.)

I felt fine partly because we have a Homecare 200 policy with British Gas, which covers the boiler, central heating and hobs. In essence: I pay £20 every month and get free  call-outs, boiler servicing and replacement parts and labour. I should post separately about British Gas Homecare: it isn’t the most cost-effective option for everyone, but if your appliances are a certain age or are beginning to creak, that policy is worth its weight in gold. At this point, I have had a number of leaking radiators replaced and suspect I own the boiler equivalent of Trigger’s Broom.

But I also felt fine because I knew I had an emergency fund to cover the mess. No stress, no fuss: I stumped up £250 for a new washing machine, and slapped down the additional fee for British Gas to make the cooker safe again (my Homecare policy comes with a £50 excess for hob “work”) like it was no big deal.

You know what they say: bad things always happen in threes.

So I waited, nervously, to see what the next domestic apocalypse was going to be. Then at the weekend, this happened:

tyre slashing spree

Yep: some delightful ne’er-do-well elected to spend his Saturday night walking up and down the streets in our area, stabbing the cars’ tyres as he went.

Result: one wrecked tyre, one shiny new replacement tyre and a £60 bill from Kwik-Fit.

Again: it came out of my emergency fund, so no biggie.

I’m writing all this down not to sound smug, but to show an emergency fund in use. Lights, camera, action! Because sometimes, crap happens.

Your emergency fund is supposed to be three to six months of living expenses. In other words: if your employer went bust tomorrow, you’d be swimming, not sinking.

If you read personal finance blogs, you’ll have come across emergency funds: particularly in America, where they have been popularised by a money-saving guru called Dave Ramsey, the emergency fund is promoted as an essential piece of kit for the fiscally responsible.

Here in the UK, 43% of families would be unable to pay the rent or mortgage for more than a month if their income dried up. Think that sounds bad? Nearly a quarter wouldn’t even be able to make it to the end of the first month. How many could keep going for three months? Or six months? I suspect the number is horribly small.

Let’s face it: the economy has been hitting the skids for the last six years now. For many of us, there isn’t much pay cheque left at the end of the month and the idea of an emergency funds sounds, well… difficult, inconvenient and not a priority when there are so many immediate demands on our cash.

The truth is that sometimes, stuff goes wrong – expensively wrong – and you can’t do a damned thing about it. In the old days, if I’d had a double disaster with the washing machine and gas hobs, I’d probably have wrung my hands, then bunged the costs on credit cards and fretted about paying them off.

I must admit that despite reading lots over the years about the importance of an emergency fund, it has taken me bloody ages to build one of my own. It has taken years of putting a little aside every month. But now I’m here, it’s a sweet spot and I’d recommend it. It takes so much worry out of life. It is liberating.

If you would like to build an emergency fund, but are not sure how to get started and you would benefit from a good ol’ dose of American can-do, here is some further reading for you:

How to Start an Emergency Fund (Free From Broke)

Is an Emergency Fund Necessary? (The Simple Dollar)

21 Strategies for Creating an Emergency Fund (Zen Habits)


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16 Responses to “THIS is why you need an emergency fund.

Threetimesthemischief says:

I totally agree that savings are essential. Back in May I walked out of my job. I have never done anything like that before but believe me it was so bad that I still have regular nightmares that “they” are going to make me go back. My hubby was supportive and we worked out how long I had to find a job. We reduced the boys nursery days to 1 day per week. At the time we had just moved (having spent every penny of inheritance on our new home). Originally we planned to let the old house. Then a week later I found out I was pregnant with baby 3! Me, who has never had an accident or misjudged a monthly cycle in her life! Obviously this put a whole new spin on things. We had to sell the old house because the mortgage wouldn’t quite be covered by rent. We got rid of both cars in favour of one family car and obviously pulled the boys out of nursery. Thankfully the old house completed in September so we are living within our means again. However, despite the fact that we had relatively healthy savings in the space of 4 months we made a huge dent in that cash and ran up a £650 credit card bill. Then we used our extra cash for Christmas to pay the card off (which HURT). Since then we have split our emergency fund. We have 6 weeks worth of bills money in an ISA and “slush” savings in a regular saving account. It’s hard to put the spare cash in savings and doesn’t happen every month but if we hadn’t have done it then who knows what would have happened last May!

March 13, 2014 at 5:52 am

You are so right about having an emergency fund. And about everything happening in ‘3’s. Two years ago our washing machine broke, followed by the boiler, and then a major problem with the house electrics. Total cost of fixing everything (including new boiler and 4 new radiators) … 3 grand! Fortunately, we had that in savings. Keeping my fingers crossed we don’t have another massive house-drama for a few years coz we are still trying to replenish the savings pot!

March 13, 2014 at 8:20 am

Glen Craig says:

It hurts a little when we have to hit our savings for a busted appliance or similar issue but it does feel good to know it won’t put us into debt. Having the funds in place for such times is liberating in a way.

And why does it all seem to hit at the same time? Sorry to hear about your tire and washing machine. Glad to hear you can cover it.

March 13, 2014 at 11:16 am

Amandah says:

Wow, the stories above put mine in the shade.
During the recent half term I snagged a bargain on a brand new Mini keyboard for my PC, from eBay.
The day it came I had unplugged everything at the mains, like any sensible person would, connected my cute New k.board, and hey presto……………it crashed my PC!!
Contacted seller of the k.board, he was so polite and assured me the k.board was 100% new.
So then contacted my friend who had graciously given me the PC a couple of years ago. She gave me the No of her PC guy, who came that evening, gave it a quick look inside the CPU, took it & the new k.board away and then came the dreaded phone call came 48 hrs later.
It was about 9yrs old so wasn’t worth fixing and I would be better off buying a new/2nd hand one, as even if he could do a patch job on it, it would worth more for the parts than the actual CPU.
Now as an adult student, who’s only income is my ‘wonderful’ JSA (which I’m just about surviving on) you can imagine how close to a breakdown I was.
Assignments, Assignments, Assignments is all I could think about, how the HECK was I going to get them done?
Well lucky for me Mr PC fix-it knew my plight and said “Leave it with me, I’ll see what I can do”.
Another 48hrs and the phone rings, Mr PC fix-it says he’s on his way to mine with my CPU.
Not only had he managed to get it working again, but had installed Windows 7 on it for me (still had Windows XP), a new hard disk AND got the New k.board to work with it too.
Now, this has set me back £80 (that’s a lot when your a student, but he is graciously letting me pay to him per fortnight instalments) but it has highlighted what your article does, that indeed an E.R fund is most definitely needed, and also the terrifying issue about how many of us would Sink, not Swim if we lost our jobs (as did i 3 yrs ago).
So once I have finished my Diploma and am back in the paid work force, then I’m going to def set about trying to get that E.R fund set up.
I got off lightly this time, next time I may not be so lucky

March 13, 2014 at 11:34 am

Miss Thrifty says:

@Threetimesthemischief: Oh gosh, there is NOTHING worse than a stinker of a job. It takes over your life. I am so pleased that, with the help of savings, you were able to move onwards and upwards.

@Naomi: We have house dramas aplenty so just let me know if you’d like me to share some around ;). The house was fitted out on the cheap before we bought it, so everything is breaking right about… now.

@Glen: Very liberating! Replacing savings is far more feelgood than having to chip away again at debt, I have found.

@Amandah: I think £80 is a lot even when you aren’t a student on JSA! So I can only imagine how horrible those computer problems have been. Your PC guy sounds nice, though. Yes, I would definitely recommend an Emergency Fund: even the smallest amounts, scrimped over time, make the difference.

March 13, 2014 at 11:29 pm

Amandah says:

That’s what I thought about the amount, but when I checked on Maplins website how much Windows software alone is, it was a penny shy of what I’m forking out & the cheapest New CPU from Currys is £149. And it dosent come with an OS.
So even though I could well do without forking out that money, I actually got a “Buy Windows 7 & get these 3 items free” sort of a deal.
Now I just have to begin saving for a New PC, as I probably have 18months shelf life on this one before it crashes again.
#sigh #expensesneverend

March 14, 2014 at 1:15 am

Andy Baines says:

Hi great blog. I stumbled upon it whilst searching for my own blog which i have set up too try help people out of debt using my own personal experiences with debt. Check it out if you get chance.


March 14, 2014 at 8:48 am

Niftynorah says:

The lawn mower has died.
The pressure cooker won’t pressure cook any more.
The electric sandwich maker has disintegrated.
WHY do things always go in threes?
The emergency fund needs topping up now 🙁

March 14, 2014 at 12:40 pm

Shannyn says:

When it rains, it pours! I know our fridge went out and we had to replace it right away- unexpected cost but we covered it with our emergency fund. Then the pug got Sick and it drained the account but at least we had It to begin with! So glad I had it saved!

March 23, 2014 at 12:06 am

Revanche says:

That old saw is really a hell of a thing. Knowing that a couple more shoes may well drop next whenever something goes wrong is more likely to give me shivers than the actual money spent in a lot of ways. It’s worth noting too that you did a fair amount of risk mitigation to begin with too, so well done both for having savings AND having decent coverage for the callouts. When something’s beyond the power of Googling a fix it’s often the cost of the callout that starts the outrage.

March 25, 2014 at 9:02 am

Clar says:

These are such great examples. I think back to when I was in my twenties and how it never occurred to me that I actually made plenty of money, I was just mismanaging it. An emergency fund (or five) would have really changed my life. At least now I know better!

March 26, 2014 at 5:56 pm

Wayne says:

WOW! My dishwasher just went out! I have a nice tool box but just in case I have to get another unit. I am covered. I have a emergency fund I call. Pay me, pay my bill, pay my what I like to call my ER fund. I am all about cost savings. Great blog site.

March 31, 2014 at 1:31 am

Mimi says:

I can totally relate to your washing machine experience! It happened to us not too long ago. Our old washer was wasting so much of our water so we finally had to have it checked and repaired. It turns out that replacing parts of it was going to be useless and we ended up buying a new washing machine. Well, the old one served us for 10 years anyway, so it was all good.

I agree that we do really need to have an emergency fund set aside. No matter how careful we try to be live our lives, shit happens. Car breaks down, people getting sick, appliances conking out, etc.

November 27, 2014 at 9:32 am

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