From June 16 to July 31, we spent almost $9,500 dollars outside of our regular budget. I have been unemployed since January 10. C has not worked since May 2009. And I do not regret any of it.
I will admit, my stomach dropped as I watched our savings account balance fall more in those six weeks than it had in the previous 5 months of unemployment combined. And yet, our balance remains at about half of what it was when we started. (Okay, confession, while it is at half of what it was when we started, it is really at just over a 1/3 of what we had- our tax refund this year was HUGE due to the adoption credit.)
What made us spend that much money? Most of it was planned expenses- C’s last quarter of tuition (he is DONE with school in one week!), home study/agency fee for adopting a second child, and bunk beds for our daughter’s room so that we have the bed space to adopt another child. Those account for over 2/3 of the money (about $6,700).
The rest was money we could not afford to not spend. C needed a root canal. We have individual dental insurance, but we have to pay a fixed amount for each procedure, and root canals and crowns are not cheap. Then we needed break and axle work done on our VW wagon (which has almost 200k miles on it). Not cheap, though also not an amount I would blink at when working, for the safety of our family.
I will be honest, every time I used to hear the advice- have an emergency fund with six months of expenses in it, I would laugh. I would think- that is just not doable, and not the way to have my money working hardest for me. The interest I am paying on my debts is higher than the interest I am earning in savings. If I have that much money sitting around, why not work on paying off debt? (Okay, I do not actually know if the money in the account would have covered 6 months of expenses all on its own. I get unemployment, and we have a few other income streams- not huge income, but supplemental.)
And, again in all honesty, we did not have that money sitting around for emergency fund purposes. It was in liquid savings because we were hoping to be able to move this summer, without selling our current house. The money was in liquid savings because it was meant to be part of a down payment.
Still, having that money there has allowed us to weather almost 8 months of unemployment in a single stretch, while still moving forward on our life goals, and not having to stress about how we are paying the mortgage or putting food on the table. We did not even have to skimp on our daughter’s birthday. (Though part of that was that we had some of that large tax refund put on an Amazon gift card, because Turbo Tax then matched it 10%. We put enough on the card for Turbo Tax’s contribution to about double what we actually paid for Turbo Tax. We knew it would be enough to cover C’s books for two quarters and birthday for our daughter.)
Some of our ease of survival comes from being prepared- we knew our budget, and knew where we could easily cut back, in addition to the Amazon gift card. Other parts come from luck- having that money in liquid savings. But most of it comes from good planning and communication between C and I.
When you have a financial crises (and I think 8 months of no one in the family working qualifies), nothing will help you get through it like having a partner on the same page as you are.