As you may have noticed in my last blog, I recently had an O.S moment. Drove to work like usual, parked my car in the deck like usual, went on with my day like usual, left way later than I would like to like usual, and my car had a flat tire.
Old me: "O.S.!! I have a flat tire how am I going to pay to get a new one?"
Budget-savvy diva-self: "I have a flat tire, but damn I'm hungry.. what to do..what to do"
As you saw, I called AAA and had them put that beautiful donut in place of my decrepit pitiful looking tire.
The following week I went to my favorite Kauffman Tire and asked what they recommended, so 4-tires and an alignment later, Betsy (as I fondly call my 1999 Camry) and I rolled on out of there safe and happy - all for a whopping $425.
Ok, so I got a good deal on those 4 new tires and alignment - but $425 is practically rent. The man at the counter even said "well I am not sure if this is in your budget or not.."
I thought to myself, "Well no sir, I did not write in 'unexpected new tire purchase' when I made my February budget." But I did think - "Well, I have almost 4 months worth of expenses saved up - and I can start replenshing that bucket as soon as next paycheck, so I should go ahead and take this good deal and put that nasty donut back in the trunk where it belongs."
Here's the how:
Step 1 - Make a budget, include Step 2 as a major goal of your budget.
Step 2 - Save $1000 as quickly as possible - this is yours to keep, not spend.
Step 3 - If you have real emergencies along the way, use your part of your $1000, and pay back in until back to $1000.
Step 4 - Pay off credit card debt - this is money you spent that you did not have. The money you make is not truly yours until your debt is gone, period - be careful.
Step 5 - Take your main monthly expenses (utilities, food, enough for gas to get to work) and multiply by 3 if you are single no kids, 6 if you are married/have kids. This is your emergency fund goal.
For some, this may be a very quick process - tax refund anyone??
For others, this could take quite some time. But true me - it's worth it!!
You may feel trapped by your budget to start - eating out less, shopping less, etc. - but once that "Oh sh!!" purchase comes and you find yourself not worried about how to pay for it, you will get to breathe the most satisfying sigh of relief you have felt in a long time.
