That’s how much my husband and I withdrew from our rainy day fund to pay for life-saving surgery and medication … for our cat.
Some people will look at that number and think, “Is she crazy? She spent that … on a cat?”
But she was having problems breathing, and we didn’t have much time to ponder the decision. Even if we did, it would have been no different. We have an emergency savings account. We love our animals. And it was within our means to pay for a surgery that could save her, so we did.
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Having that cushion allowed us to make—and afford—a crucial in-the-moment choice. The whole point of keeping an emergency savings account is, after all, to be prepared for the unexpected, whether that means an appendectomy or a pink slip.
For that reason alone, it’s never too early to start building a stash of readily available cash. Many people put off building an emergency fund because they think, “it won’t happen to me.” But the LearnVest rule of thumb is to have at least three to six months of your net pay set aside (depending on your circumstances), because, as these real stories show, life doesn't always go according to plan.
Eric Heininger, 28
The emergency: Car repairs
Total from savings: $1,060
When Heininger received a phone call at work from his girlfriend, Stephanie, at 8:55 a.m., he knew something was up. That seemed an unusual time for a daily loving check-in. “Her voice was trembling, and she said that she had just been involved in a car accident on the expressway,” he recalls. She was physically OK, but understandably shaken. The car was still drivable, so after speaking to a police officer on the scene, she drove the car—their only one—back home.
Heininger was shocked when he saw it. “I could not believe that our little 2006 Honda Civic was still mobile,” he said. “Cracked lights, broken pieces and crumbled panels. It was not damage that could be ignored beyond a mile or two.”
The insurance estimate was about $7,000. Most of it was covered, but there was a $1,000 deductible that the pair had to pull from their emergency savings account. “This was the perfect example of how we used [that money] without batting an eye,” Heininger says. They wrote the check, and six days later the car was as good as new. “We even splurged and spent an extra $60 to upgrade to a larger rental vehicle before we got our car back, to alleviate some of the nerves we had about driving after that jarring accident," he says.
Robyn Chang, 42
The emergency: Home damage
Total from savings: $4,000
What started out as paint bubbles in Chang’s dining room ended up requiring the replacement of an entire wall—and then some—with a price tag of $8,000. The bubbles became peeling holes, and the holes revealed black spots—indications of more than mere water damage: It was mold.
The initial estimate to fix what she believed would be just a portion of the wall was $2,000. But after the contractors started their work, they realized the problem was worse than expected. “It was so bad that instead of replacing the parts of the wall where we thought the mold was, they had to replace the entire wall,” she says.
Chang and her husband lived in an older row house at the time, and the real estate flipper who remodeled it had not rebuilt the wall properly. To make matters worse, she and her husband decided to redo the roof as well, because it was the cause of so much moisture getting inside.
"What started out as paint bubbles in Chang’s dining room ended up requiring the replacement of an entire wall—and then some—with a price tag of $8,000."
Chang's insurance provider gave them only $1,800 toward the total bill, stating it would only cover the cost of repairing the mold damage. So Chang and her husband had to dip into a small emergency fund to cover $4,000; the remaining $2,200 they put on a 0% interest credit card until they could pay it off.
It was a necessary cost to swallow because the structural damage was so severe. "The wall was part of an extension that also held up a roof deck," she says, "and had we not repaired it, the contractor told us the roof deck would have collapsed."
David DeStefano, 23
The emergency: Hit by a car
Total from savings: $1,250
DeStefano’s daily bike ride to work was one he usually enjoyed. He was working as a forklift operator at a warehouse about five minutes from where he lived, and would ride his bike every day to work. One rainy day he was in a rush to get home, pedaling as fast as he could to avoid getting drenched. Part of his route included a crosswalk that was near an exit from a highway. “As I was going through the crosswalk, an SUV came flying down and hit me,” he says.
DeStefano flew onto the hood of the car, then onto the cement. An ambulance hauled him off in a stretcher to the emergency room. The nightmare wasn’t over, though. After talking to the police, he was told that legally, he wasn’t supposed to be riding on the crosswalk because it was only for pedestrians. His insurance company considered him “reckless” and wouldn’t cover his medical expenses. Fortunately, his injuries weren’t severe and he fully recovered, but he had to spend approximately $700 for the ambulance, $500 for the hospital and $50 in pharmacy charges out of pocket. He had been saving for a move to New York City, and dipped into that fund to cover those costs. “I was planning on leaving two months [after the accident] and had to really save afterward to make up for what I [lost],” he says.
Alyssa Coluccio, 24
Albany, New York
The emergency: Grad school and relocation costs
Total from savings: $6,700
In January 2012, shortly after getting her first job writing for a music website, Coluccio began putting about $100 from each paycheck into a savings account, not knowing exactly what she might use it for. “That money was for emergencies and future living expenses, but at that time I was thinking that was more like a house, or a wedding,” Coluccio says. Going back to school wasn’t part of the picture.
By September, though, she'd had an epiphany about the direction she wanted her life to take. Coluccio realized she wanted a career that would have a more direct impact on adolescents. Specifically she wanted to teach English, so she applied for a master’s in secondary education.
“I knew there would be a lot of expenses with going back to school and leaving my job,” she says. She upped her savings in order to build up as much of a cushion as possible while she still had a job, and by the time she left, she had about $7,000 saved.
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Most of her tuition costs would be covered by financial aid and student loans, and her savings were to tide her over for essentials like rent, utilities, groceries, and books until she got a job. But the transition wasn’t entirely smooth. Her moving truck was more expensive than she anticipated; she'd rented a larger apartment, so she needed more furniture; and during the move, she lost some clothes and broke some household items, which had to be replaced.
Then there was the new laptop and the summer prerequisite course she had to pay to take off campus, after the university suddenly cancelled its own class. These last-minute extras added up to about $2,500, and all told she spent a good chunk of her savings on the move.
“I think it was difficult to spend that money because I knew how hard I worked to save it,” Coluccio says. “It did show me the value of having a savings account, though, because I’m not sure I would have been able to make the decision to quit my job and go back to school.”