How the Emergency Fund Saved My Basement
My wife was out-of-town on a work trip and my phone was turned off for the night. When I went outside to do chores that morning, I discovered the rain gauge was brim full…5″ worth of rain. We have a mostly finished basement and I knew there was a spot in the wall of the unfinished room that leaked if it rained hard for a short amount of time. It’s a walkout basement so I intended to enter from the outside…and that’s when I saw water standing in the bottom of the stairway next to the door. I got nervous and quickly ran inside, down the stairs…only to have my feet hit squishy carpet at the bottom! My heart started raising as the panic quickly set in. I flipped on the lights and started walking along the carpet in the main room, feet squishing with every step. But when I opened the door to the unfinished room, my heart sank. There sat about 4″ of water across the entire room! The culprit was the drain in the bottom of the outside stairwell. It had backed up and water was coming in around the door. Boxes were soaked, the carpet was soaked, the drywall was wet. It was a living nightmare and something I wasn’t prepared to handle on my own. I immediately called my mother. She’d unfortunately had her fair share of flooded basements. And she shared my fear and concern. My dad made the 40-minute drive over as fast as he could and we finally got all the water pumped out of the basement and out of the drain…which was still backing up.
It took all morning to get everything moved, water hauled out, and valuables tended to. It was a mess. In the end, we called a cleaning company to pull up the carpet, throw out the ruined pad and cut off 1′ of drywall that was soaked. Unfortunately, we weren’t the only ones who experienced a flood that day. But to make our situation worse, because the drain was outside…the accident wasn’t covered by our homeowner’s insurance. And the cleaning bill was expected to be over $3,000. Not to mention replacing the drywall and carpet (thankfully it wasn’t ruined, but we were unable to reinstall it due to stretching). Altogether, the damage totaled close to $5,000.
But…we were okay. We had an emergency fund. We had saved 3-6 months worth of expenses in case something happened. Something big and unexpected. Something that had to be dealt with immediately but would otherwise cost more than we could afford. A real-life emergency.
That emergency fund saved us from the aftermath of our flood. We were able to pay for everything without touching our savings, using a credit card (which we don’t have anyway), or overextending our monthly budget of expenses. It made what was otherwise a very stressful situation (and stressed out we were for at least a week), into a manageable predicament. It was a life saver and helped us keep most of our sanity as we sorted through the mess and planned for repairs.
Unfortunately, too many people don’t have an emergency fund. So when a crisis happens…a flood, blown transmission, sickness, wreck, lost job…it’s an emergency with no way out. They have to pull from savings (if they have any), put it on a credit card (and pay interest on the emergency itself), or figure out a way to cover the costs without going broke in the process. It’s a nightmare within the nightmare.
But that can all be avoided. Once you’ve accomplished Baby Step 2 and paid off all your debt except the house, building the emergency fund to a full 3-6 months of expenses often takes less than 1 year. And then…you never have to worry again. You never have to fret or be anxious. Because if, I mean when, something happens…you’re ready to write the check, take care of the situation and keep living your life…focused on what is really important. And it shouldn’t be worrying about how you’re going to survive financially.
I’m so glad we have our emergency fund and I’ll be even happier when you do to! To get started, visit RamseyCoach.com and book your free consultation.