Emergency Fund

I have constantly been reminded that you should have an adequate emergency fund. Most experts state that you should have 3-6 months of liquid reserves. It appears that this is a valuable thing especially when unexpected things happen. In my life these things seem to be happening all at the same time.

Last August my wife and I bought our dream house. It was finally large enough to meet all of our space needs. Prior to this purchase the six of us lived in a 1900 square foot house. We had our four boys in one room so that we could use one bedroom for all of our toys. Thankfully we live a fairly simplistic lifestyle and don't have much stuff. When we bought our new house it needed quite a bit of updating. We stripped wallpaper, painted, took out the pink counter top in the boys bathroom, and renovated the dated basement.

As a ministry opportunity we added a kitchen in our basement to accommodate a young and pregnant woman to provide her with a safe place to live, that was away from her abusive boyfriend. We had not expected this added expense, but were happy to spend the money to assist her on getting back on her feet. At this point is when the large unexpected expenses started to come. Our van had a new intake manifold ($1200), a sewer backup that ruined the brand new flooring I had installed in the basement ($2,000), and quite a few overruns in our remodelling budget for the house, especially with adding the unexpected kitchen counter tops, cabinets, and appliances.

Unfortunately, the living arrangements did not work out with our new tenant and she is back with her abusive boyfriend, but that is part of life. We are going to spend the next few months building our reserve funds back-up to a more comfortable level.

Adding to our financial stress are apartment related issues with our rental business. These have included a fire at one of our units in November 2007. As a result of our fire, the City has required us to install a sprinkler system ($17,000); horns, sirens, and strobes ($4,000); and we also needed a new roof, siding, guttering ($30,000); in addition to remodeling the burned unit that was covered by our insurance less our $5,000 deductible ($34,000). Also, last week we found a water leak in a house that we had that has been vacant. We are trying to buy the adjoining property and had been waiting to determine the usage for the property. However, our note comes due in two months so we must do something now to get the property rented before the bank has to reappraise. Currently, we are ripping out all flooring, paneling, and other items in an attempt to remove all of the water damage. It appears that a pipe froze and had been leaking for quite some time. Unfortunately, this is not covered by our insurance since the property was vacant. Adding to our stress I mistakenly transferred money from my brokerage account into my checking account instead of from my checking to my brokerage account. This mistake caused my brokerage account, that I had written checks against to overdraw and created additional pressure with damages to our reputation for writing bad checks and an increased sense of scarcity.

All of these things show me the increased stresses that tight finances can have in some one's life to the point of damaging their relationships with others including their spouse; a lack of self confidence to keep moving forward, and a sense of hopelessness that may cause some to give up. Therefore, I want to never have any of these feelings again and to try and assist others in avoiding these same types of feelings. It has become our priority to focus on our finances and build our reserves up to the point where we will never be in this situation again. In order to do this we are not spending any money that is not a necessity. We had to forgo gifts for valentine's day, unless you count the intake manifold; anniversary gifts; and other items that we do not have to have.

I will close with the following scripture that relates to our financial situation and the lessons we have learned as a result of these trying times.

From the Message Bible and the book of James

Consider it a sheer gift, friends, when tests and challenges come to you from all sides. You know that under pressure, your faith-life is forced into the open and shows its true colors. So don't try to get out of anything prematurely. Let it do its work so you become mature and well-developed, not deficient in any way.