If you aren’t familiar with calamity, or never faced an unfortunate situation that feels like an overwhelming amount of pressure collapsing on you from all sides, then this is for you. This is obviously speaking in regards to finances, and yet when you experience this, finances is the last thing on your mind. This is my personal story and it relates to the importance of having an emergency fund.
So there I was, coming back from a mild 3000-5000 meter ocean swim (I can’t remember the exact distance, but it was probably like a 10K with no fins in freezing water…) in Destin FL, finishing another morning physical fitness training event while in pre-scuba when I got the call. It was my wife on the other end of the line explaining to me in a cool, calm, and collective manner on how I needed to come back home — right away! Heather had just experienced complete loss of sight in her right eye and they needed to conduct emergency surgery. The doctor had just relayed to my wife the urgency of the procedure, and the longer she waited, the higher the risk became for a successful recovery. So she confirmed the date for the following day to conduct the pre-surgery.
On my end, if you know anything about the military there are but a few critical things that can happen to make one leave their place of duty, and those are: loss of limb, eye sight, or life. Heather met the criteria. So, that night I jumped in my vehicle and drove straight home (about 13 hours), and just in time to get a shower and shoot out the door to take her into see the doctor the following morning. We walked in, played the stand around game, filled out the appropriate documents and proceeded with the appointment. Afterwards we linked up with the receptionist to pay, schedule the hard time for the actual surgery, and then go on our way. This was not the case, and we were stopped in our tracks.
The receptionist directed us to another room, where we waited to speak with someone else. When the women finally arrived, she revealed to us that we didn’t have insurance and that we would need to come up with the funds ourselves. This of course was news to Heather and me. I had just recently departed the active military and joined the National Guard, but I knew that I definitely turned on the insurance. Besides, prior to this situation I had finished another deployment and was in pre-scuba when this had occurred. This was definitely Murphy’s Law in full force, there couldn’t have been a worse time for it to happen.
We went straight to the emergency funds, but it wasn’t enough. So I began to call up every debt that I had out there. I also cashed in my IRA, maxed out the credit cards, and cleaned out my savings account. Nonetheless, after everything was said and done, we were able to pay for it. And most importantly, Heather’s recovery went well (furthermore, we corrected the insurance issue). *Side note: if you’re in the National Guard and you deploy or go on an active status they automatically shut off your insurance and put you on full time status; however, when you get back they don’t put you back on the previous plan you had before they removed you. They don’t even tell you that they shut it off. Also, if you cash out any type of retirement fund early, know that there are going to be fines and taxes that are owed as well — FYI.
The purpose of my tale, as previously mentioned, was to share with you the importance of having emergency funds. You never know when Murphy is going to step up and just crush you. I too fell short of being properly prepared, but from this I learned and took corrective action.
Another fundamental concept to keep in mind is to have your savings and your emergency funds as completely separate elements. They should NOT be used in conjunction with each other, and don’t ever touch your emergency funds until that fateful day. In fact, just open up an entirely independent account.
Also, no one can tell you how much money is right for you or your family. However, I would recommend to have at least 1-2 months of monies on hand (preferably 6 months) to pay your bills and/or your max on your most expensive insurance deductible (i.e. vehicle, home, medical, etc.). You will never know how much you exactly need, so plan for the worst and hope for the best.
Until next time…
Let’s Go Home