Category: Emergency Funds

Surprise Money!

Raise your hand if you’ve found some surprise money in your bank account this past month!

While a great many people have lost their jobs, those who haven’t might have noticed that there’s definitely extra money in their bank accounts. This is called surprise money because most people are surprised by how much they normally spend. Despite the wisdom in doing so, great numbers of folks simply do not track their spending. Staying home to avoid the coronavirus has resulted in far less money trickling out of people’s wallets. When people finally do look at their bank accounts, some are surprised by how much money is still in there!

For my part, I haven’t had to buy a bus pass since February. When I check my bank account, there’s an extra $200 sitting there. Is it a life-changing amount of cash? Not by a long shot. Will it be shuffled into my emergency fund? That’s a big 10-4!

Another of my dear friends confessed to me that an extra $2500 has remained in the household budget because so many things have been cancelled. That’s not an insignificant amount of money!

If you’re among the fortunate ones whose income has not been negatively affected by COVID-19, what are you doing with your extra cash?

  • Have you just transferred your spending to online purchases?
  • Are you paying down debt?
  • Have you directed some love to your emergency account?
  • Is the extra money being diverted into your investment portfolio?

The pandemic is causing many problems for many people – no doubt about it! Through no fault of their own, too many people have lost jobs and are facing extreme levels of financial stress as they figure out how to pay for their lives.

Yet, there are still many who have extra money during this pandemic. No salons – no concerts – no sports eventing – no retail therapy at the mall! So many of the quotidian opportunities to spend money have been curtailed. Wallets are staying closed simply because people haven’t found replacements for the places where the money used to go.

When the pandemic is over, will you go back to the way you used to spend?

This is a question I’ve been discussing with my friends. Some of my dear ones believe that people will change their behaviour for a little while, and then gradually return to old spending patters. Others are convinced that the pandemic will make an indelible imprint on this generation – much in the same way that the Great Depression shaped the money habits of today’s oldest citizens.

Personally, my position is that people are going to go back to their old spending patterns. It might take some time but it will happen eventually. Generation X grew up with credit cards. We’re also very comfortable with the monthly payment plan. For my parents’ generation, one saved up for years to afford to buy a car. Today, it’s about affording the car payment. I don’t see that one little pandemic is going to change decades of spending behaviour too, too much.

We might spend on different things once the pandemic is over, but we will keep spending. Once people feel safe enough to venture out of their homes and back into business establishments, they will return to their ingrained spending patterns. Those patterns are comfortable and familiar. Plus, the Ad Man and his trusty sidekick, the Creditor, will be back up and running, full steam ahead.

Right now, I’m urging those of you with extra money to not squander this opportunity. If you’re able to squirrel away an extra $1,000, then do so. And if it’s less, squirrel that away too. The pandemic won’t last forever. Chances are you will be very strongly tempted to return to your regular spending patterns. After all, you spent your money to enjoy your life before. Why wouldn’t you want to spend money to enjoy your life once COVID-19 is no more than a bad memory?

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Weekly Tip: Build your emergency fund in a high interest savings account. Online bank accounts generally pay more than what you can get from a brick-and-mortar bank. Compare rates online, then open an account. Set up an automatic transfer so that a portion of every paycheque goes into your emergency fund until you have 9-12 months of living expenses set aside for emergencies. Unless you’ve got a very big paycheque, it’s going to take you some time to save up this amount of money. I think you’ll agree that should you lose your job, you won’t regret having taken the time to fully fund your emergency fund.

“Gee! I wish I didn’t have all this money set aside to help me get through this emergency!” said No One Ever.

Stay Home – Save Money!

The entire world is facing the COVID19 pandemic right now. There is nowhere to hide, and there is currently no vaccine from this disease. However, each of us has the power to slow its spread. We should all do what we can to stay home!!!

It’s very simple: stay inside your own home.

The coronavirus that causes COVID19 is a respiratory virus. It is spread through droplets in the air when people are around each other. To slow its spread, each of us must stay home. And if we must go out for essentials, then we should practice social distancing by remaining atleast 6 feet away from others.

If you stay home and if you practice social distancing when not at home, you will be doing your part to limit the spread of COVID19.

Tackle your to-do list!

Stay home! Use the time to do those things that you always say you’re going to do but don’t actually do. For example, is there a closet that needs to be cleaned out? Have you sorted that catch-all drawer that drives you crazy each time you open it? Weren’t you thinking of writing a book or starting a blog?

If you’re not good at it, learn to cook. The internet has countless websites that will teach you the long-forgotten art of cooking for yourself. Start at the All Recipes website and work your way around the world wide web. Since you’re staying home anyway, you have the time to simmer and braise and boil and bake and sauté and dice and julienne and all those other magnificent things that cooks do in the kitchen. Feeding yourself is one of the easiest things to do in cutting down on your expenses.

Since the pandemic was declared, I’ve spent a lot of time in my kitchen. I’ve made lasagna, meatballs, spaghetti sauce, and chicken. I’ve baked a cake and a batch of cookies. My freezer is filled with pre-portioned packages of chicken marinating in lovely sauces that I made myself. Thankfully, I’m back to hitting my daily target of 10,000 steps per day! This weekend, the plan is to make a delightful dish called Chicken, Sausage, Peppers & Potatoes. It’s simple and tasty, and it also creates absolutely delicious leftovers.

If you’re still employed, be grateful.

The economy is very volatile right now. Millions of people have applied for employment insurance because their jobs have disappeared for an indeterminate amount of time. They don’t know if they’ll have jobs to go back to when this is over. Through no fault of their own, their economic lifeline has been cut and they’re working through the process of figuring out how to pay for their lives.

There are other millions of people who haven’t lost their jobs. If you can count yourself among those who are still employed, then it’s time to start trimming the fat from your budget. The emergency fund needs some love right now. Right now, the focus of your money needs to be on food, shelter and transportation. Everything else can wait. Books can come from the library – you can get the Libby or Overdrive app for your device if your physical branch is closed.

Find other ways to save money right now. I’m not an economist, nor am I a financial planner. It’s just my gut that is telling me that the macro economic situation is going to be challenging for the vast majority of us for a while yet. If you have a paycheque coming in, then you should strive to make it last as long as possible. Stop living paycheque-to-paycheque! Put a portion into your emergency fund. Pay your bill on time, yet ensure that you have as few bills as possible. Do not take on any new debt right now. If you can’t pay for it in full (whether cash or debit), then you can’t afford it right now. Save up your money and buy it later.

COVID19 is not going to last forever. This pandemic is definitely a huge challenge and it will continue to cause grief until such time as vaccine is found. The good news is that as each day passes, we are that much closer to finding one.

Stay healthy – stay safe – stay home!

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Weekly tip: Track all of your expenses so you know where you spend every dollar.

I am not an Economist

First and foremost, I am not an economist. I write this article as someone old enough to remember H1N1, SARS, the Great Financial Crisis, and the DotCom crash. I’m quite certain that there were other economic challenges earlier in my life but I was young enough, or naive enough, to take no notice of their impact on my life.

Anyone who pays attention such things knows that the stock market is experiencing a great deal of volatility right now. Most people are scared of contracting COVID19. Businesses are shuttered. Some people are losing their jobs. Other people are trying to hoard essential products. Pictures of empty grocery shelves are everywhere.

It’s easy to be afraid right now.

Again, I am not an economist. However, you should have faith that the stock market will recover. When? No one knows. Yet, I am 99.999% certain that this is not the end of capitalism. The supply chains are still running. Grocery shelves are still being stocked. Prescriptions are still being filled.

Very smart people all over the planet are working on a vaccine for COVID19. They will find one.

What I think you should do

Do not panic with your investments! If you can avoid it, then do not sell anything in your portfolio right now. The only way to lock in a loss is to sell when the price falls.

The stock market will recover from this dip. No one knows how whether the recovery will happen by the end of 2020, or whether it will recover in 2 years. However, the impact of COVID19 will become an item in the rearview mirror when the stock market starts to go up again. Just like H1N1, SARS, the Great Financial Crisis, the DotCom crash, and all the other economic shocks that have preceded this virus.

Should you be one of the fortunate ones who has stable employment right now, then I urge you to stick to your current investing schedule. This suggestion is based on the assumption that you have a fully-funded emergency fund of atleast 6 months of expenses. If your emergency fund isn’t this full, then cut out non-essential spending until it’s nice and fat. You’ll never regret having an emergency fund when you need one!

Keep your investing schedule in place. I invest monthly. I plan to continue investing unless circumstances drastically change. A long time ago, I decided that timing the market would only drive me nuts so I’ve never attempted to market-time my investments. Instead, I opted to making regular investments into the stock market every month. Money goes in – dividends get paid & re-invested – money goes in – dividends get paid & re-invested… ad infinitum…

If you have an investing schedule, then stick to it. Right now, investors have the ability to buy equities when prices are low. Again, I’m going to state the obvious – the stock market is low right now. No one – and I mean NO ONE – knows if we’ve hit the bottom of whether the stock market will continue to fall over the next few weeks. Yet, those who invest in a broadband index funds (or exchange-traded fund or mutual fund) and who stay invested for the long-term will see positive returns.

Note that I’m only referring to buying broad-based index funds and similar products during this downturn in the market. If you’re the sort who engages in stock picking, then I wish you all the best. Stock analysis is not something that I would suggest. I have no way of knowing which stocks will recover to unseen heights and which ones will crash when the underlying business fails.

Learn from my mistake

Full disclosure: I am a self-taught buy-and-hold investor who believes in dollar-cost averaging. This means that I skim money from each paycheque to invest in the stock market on a regular monthly schedule. I invest in exchange-traded funds, and I’ve done well.

However, I haven’t always made the smartest decisions with my money. I’ve made significant errors with my own investments. One of the worst decisions I made was back in 2008 when the stock market plunged. The value of the stock market was falling and I made a HUGE mistake. I stopped investing money on the way down!!! My fear took hold and I decided to wait until the “market got better”. Thankfully, I was smart enough not to sell but I wasn’t smart enough to stick to my strategy to dollar-cost average into the market.

Had I stuck to my strategy of investing money every month, I would have been buying during the market crash. This is known as “buying low“, and it’s an exceptionally good thing when you plan to hold onto investments for a very long time.

If I hadn’t erred, I would have taken full advantage of the recovery that started in 2009 and that ran up until a few weeks ago. My portfolio might have been big enough to let me retire a few years earlier than planned had I not made this monumental error.

Though I can’t remember exactly when, I did re-start my investing schedule and I’ve stuck to it ever since. COVID19 is not going to prevent me from counting to save-invest-learn-repeat. I will still move money from my paycheque to my investing account. Every month, I’ll continue to buy units in my exchange-traded funds. I will not stop regular investing this time around.

And if my income isn’t stable?

If your income is variable, or in doubt, then your focus needs to be on eliminating all non-essential spending from your life so you can squirrel away your cash. Right now, your priority has to be survival – rent/mortgage, food & prescription medicines. Everything else has to go on the back-burner until you get a handle on how you’re going to continue to receive an income.

Focus on beefing up your emergency fund. That money that used to go to drive-through coffees? Stick it in your emergency fund. Your monthly massage? Social distancing means massages are out for a while. This is a really good time to cut subscriptions to things that no longer bring you joy. Find the fat in your budget and trim it away so that you have money to live on if your income goes away.

Keep your money liquid in a high interest savings account. Allow me to state the obvious: you will need cash to get you through the hard times in case you lose your job. This is not the time to be making extra payments to your debts, nor is it the time to start investing in the stock market. Gather your money in a safe place so it will be there when you need it.

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Weekly Tip: Stop non-essential spending for the next few weeks. Top up your emergency fund. Stay indoors. Wash your hands. Stay healthy!

In Sickness & In Health

Emergency funds… you need them in sickness and in health.

My workplace has been a hotbed of germs and colds and flu for the past few weeks. Even I had to take a day off to give myself some time to rest and recover from my head cold. And I started thinking about how fortunate I am to have sick leave banked for times like this. Staying home for the day won’t impact my salary. I can focus on feeling better without worrying that my paycheque will be less than normal.

Some people are not so fortunate. For many, many people, a day away from work means losing money. As we all know, bills don’t take a break. Whether you’re sick or healthy, the bills and expenses of life need to be paid. If missing work due to illness would negatively impact your paycheque, then you need to have emergency funds set aside somewhere.

It is absolutely imperative that you have some money stashed away to replace your income. You don’t know when you’re going to get sick. And you don’t want to be thinking about the damage to your monthly income when you’re dealing with a runny nose, body chills, and a hacking cough.

Emergency funds take time to build and, once used, time to replenish. They should be relatively easy to access, so I suggest putting this money into a high interest savings account. When you’re healthy, find a way to squirrel away some cash into this financial necessity. Challenge yourself to set aside a particular per diem until your emergency fund has hit six months worth of expenses. Maybe you’ll pay $5 per day, maybe $10 per day. Even $1 per day is a good goal if your budget is particularly tight. Trust me – you will never regret the small sacrifices that you had to make when you truly need to rely on your emergency funds.

Let’s say that you had a car loan or student loan that you’ve just finished paying off. After congratulating yourself for paying off a debt, re-direct that former payment to the care and feeding of your emergency fund. You were living without the money before so you can continue to live without it for a little while longer.

The last thing you need to do when your income drops is to go into more debt by borrowing money to make up the lost income. Emergency funds can drastically reduce the need for you to go into debt.

Finally, make sure to replenish your emergency funds after you’ve used them. Emergencies can strike at any time. The sooner you get yours back to full strength, the better prepared you will be for the next one.

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Weekly Tip: Cut back on how much TV you watch so you can get rid of cable. The added benefit of less viewing time is less exposure to marketing. You’ll be amazed by how a significant reduction in TV-watching dampens your desire to buy stuff.

Prepare for Burnout

Do you want to know a secret about burnout? Here it is… almost everyone keeps burnout a secret from everyone else.

I’ve attended many graduation ceremonies in my time, my own and those of loved ones. I’ve also had various mentors over the years. While they weren’t all great, they all taught me something valuable. And I’ve also had the opportunity to read many, many books & blogs about career-planning.

Here’s the secret… Not a single one of those sources has ever told me that burnout is a thing, and that I might one day face it. Not a single one of my mentors gave any hint that they were dealing with or had ever dealt with burnout – not a single one of them said a word about it. There was never a hint that decades in a given career could lead to anything other than stability, satisfaction, and challenging work.

It’s astonishing! When you think of how many people you might know who just go through the motions, it’s really quite remarkable that there’s an almost coordinated collusion by those-who-have-gone-before to never tell those-who-are-coming along that they won’t always be happy, engaged, or fulfilled by their chosen career.

Quick! Do you love your job?

Whether the answer is yes or no, you should save money now in case you get burned out at work at some point during your working life. In my humble opinion, people don’t talk about the possibility of burnout when planning their careers. If you’re lucky, you start out eager and happy and engaged. And if you’re very, very, very lucky, you’ll continue to be enthusiastically engaged with your career for a long as you have it.

Not all of us are so fortunate. There are people who simply get burned out and simply. Can’t. Do. It. Anymore! They can’t drag themselves into work another day. If you were to ask them to be honest, they would say that they feel like their lives are being wasted as they grind it out. In short, they hate the lives that they’re living. 

Of course, maybe it’s not your job that’s causing your burnout. Maybe you have obligations to extended family that are stressful. Perhaps you’re having trouble getting out of debt. There could be an undiagnosed physical illness. Whatever the reason, the end result is burnout as you try to handle everything that’s on your plate. The ugly reality is that burnout drains your ability to feel joy, to laugh with abandon, to experience that joie de vivre that makes life so much more enjoyable.

If this is you, then know that this is not a good way to live the only life that you have!

The antidote to your burnout might be a break from work. Definitely speak to a medical professional for a proper diagnosis. At the very least, a doctor can figure out if what you’re feeling is caused by something other than your job. And your doctor is the one who can put you on stress leave if that’s what you need to recover from the horrible feeling of burnout. 

Build Your Stash

Trust me when I say that the bills won’t stop during your recovery period!!!

What do you mean, Blue Lobster?

Money in the bank and cash flow from investments gives you some options when you’re facing burnout. Instead of being miserable and continuing to feel the bleakness that penetrates to the very depth of one’s soul, you have money so that means you can quit if you need too. You have the financial wherewithal to leave employment situations which make you want to cry.

Having a nice, fat cash cushion alleviates any concerns about how to pay for life without a job. Think of your recovery as a mini-retirement, or a little sabbatical. There might not be any income coming into your household, but the cash cushion means that you don’t have to worry about that. You can focus on doing what you need to do in order to feel some joy in your life again.

It would be unfair if I didn’t recognize that there are some great employers out there who recognize that burnout is a reality. If you have burnout and work for such an employer, then you’re quite lucky despite how you feel about your job. If you’re considered a good employee, then you may be able to get time off from you employer to recuperate. In other words, good employees may be offered a sabbatical. Great! Kudos to employers who recognize the benefits of helping their best employees to deal with burnout. However, sabbaticals need to be funded with real money.

And let’s be realistic – this is a benefit that is very rare. Be brutally honest with yourself. Would your current employer give you months off to recover from burnout?

Hopefully, you’re reading this when you don’t have burnout. And if the deities are kind, you will never experience this horrible condition. But as the Wise Ones know, hope is not a plan. Take steps today to start preparing financially for a time when you just might need to take more than a week or two of vacation to re-charge your batteries.

No one likes to think about bad things happening. Sadly, this preference won’t stop burnout from occurring. Be proactive! Take steps now to financially cushion yourself just in case you need to walk away from your job to protect your mental health.

A Little Bit of Wisdom

I’m sharing the following bit of wisdom respecting the mortgage cash account. I don’t think this is a particularly good option for mortgage-holders, but I’m trying to keep an open mind.

The Mortgage Cash Account

My bank holds the mortgage on my rental property. I make bi-weekly payments on my rental property because I want to have it paid off sooner rather than later. By making bi-weekly payments, I’m prepaying my mortgage. Essentially, I’m paying it back faster than required under my mortgage contract.

The mortgage cash account is the accumulation of those extra payments. It’s a visual reminder of how much principal I’ve repaid since starting my bi-weekly payments.

The account is also a visual temptation to spend that money. My bank spins this account as a good thing. They tell me that if some kind of emergency crops up, then I can withdraw money from my cash balance account and that money gets added back to my mortgage. In short, the mortgage cash account allows me to get my extra payments back at a moment’s notice.

Why the Mortgage Cash Account is generally a Bad Idea

At face value, it sounds like a good benefit. In reality, it’s not. This option works best for the bank because it means that I can go back to paying the maximum amount of interest on my mortgage loan. This is not a good thing for me, nor any person who wants to be free of their mortgage debt as fast as possible.

The reality is that I can use that money to go on vacation, buy lollipops, or set it on fire. The money doesn’t have to used for an emergency. There is no obligation to use it on a new roof, or a sewer line repair, or to remove downed trees from my property. The bank doesn’t care how I use that money – they only care that I eventually use it so that they can charge me more interest on it.

Do you see how this could be an impediment to achieving my goal of being mortgage-free? Is it as obvious to you that the bank’s goals are adverse to mine?

Let’s be very honest – most people will simply spend the money from the mortgage cash account on whatever they want. However, if the goal is to pay off the mortgage ASAP, then people should not be spending their prepayments and simultaneously increasing the size of their mortgage!

Emergency Funds are the Better Option

Again, the emergency fund is for emergencies. This is the little bit of wisdom that I want to share with you. No one should be in the position of having a mortgage without also having an emergency fund in place. When the emergency hits, and it eventually will, you shouldn’t be looking to your home to cover the expenses resulting from the emergency.

If you’ve used your emergency funds to pay off the emergency, then you need to re-organize your priorities so that you replenish your emergency fund as quickly as you can. Easy? No, not really. Necessary? Yes, definitely! You always need an emergency fund, no matter what. So do what you have to build one and to keep it funded.

Taking money from your mortgage cash account means increasing your mortgage balance. It means that all your hard work to make prepayments to save on the interest is vitiated. Don’t do that to yourself! If getting rid of your mortgage is a priority, which it should be, then do not use your mortgage cash account. Instead, build and maintain an emergency fund while you’re simultaneously paying off your mortgage.

Make Hay While the Sun Shines

This week, I was very sad after reading an article in the Walrus about how so many people in Canada go hungry on a regular basis.

The article reminded me that being able to eat every day is a privilege that I take for granted. I have enough money so I can go to various grocery stores and buy the food I need to eat three good meals each day. I have money to go to restaurants with my friends. I have sufficient funds to eat fast food when I’m too lazy or too disorganized to have done my meal prep. I have money and, therefore, I have food.

However, eating shouldn’t be a privilege accorded only to those with money. Without food, people die. It’s that simple.

There are many reasons why people don’t have money, why they can’t afford to feed themselves. Unemployment, mental health problems, evictions, rental increases, homelessness, family conflict… These are just a few examples that readily spring to mind. Regardless of the reasons for lack of money, that article from the Walrus made me question if we, as a society, are really willing to let people starve to death for lack of funds?

I don’t have the answer to that question, nor do I have any particular wisdom on how to eradicate the pervasive presence of poverty. My purpose with this article is to encourage you to think about what you can do today to minimize the risk of starvation becoming something that you have to face.

First things first – be grateful. If you have food, shelter, family, health, then you’ve already been blessed with what’s most important. Be grateful for what you have and never take your situation for granted.

After reading this blog for some time, you know that I’m a huge advocate of squirrelling away your money. Yes, it’s important to enjoy each day as it comes but not if it means spending every penny you have. You don’t know when the next emergency will hit, when you’ll get sick, when you’ll lose your job, etc…

The time to save for tomorrow’s emergencies is now. Money is the buffer between you and many bad situations. Money in the bank gives you options when you need them most. Having money in the bank means you can survive between employers, between contracts, between assignments, between paycheques. It means that you can continue to live somewhere with a kitchen and a fridge and a stove and a place to store the food that you will be cooking for yourself. Having money set aside means that you’ve created a bigger gulf between yourself and a situation where you don’t know when you’ll next have something to eat.

Once you’re in that situation, it’s very hard to get out of it because you’re too focused on daily survival to make plans for the future. Take my advice – start now!

I want you to calculate your personal per diem, ie. your daily cost to survive. Track all the money you spend in a month then divide that number by the days in the month. For example, if you spend $3000 per month, then your per diem is $100/day.

Then figure out how long you think it would take you to find another source of income if you lost your current one. Double that timeframe! Finding good paying positions – whether through freelancing, self-employment or working for others – isn’t easy. Be conservative! Assume that it will take longer than you expect and plan accordingly.

Then look at how much money you already have set aside in a savings account. How many days could you survive off what you’ve saved?

Having per diem money put away is your safety net. It should go without saying, but I’ll say it anyway, that the more money you have then the stronger your net.  Per diem money will help you to avoid the risk of starving if your income disappears for a time.

There is no perfect fix to the issue of poverty. However, there are steps you can take to lower your risk of falling into a poverty so deep that you cannot feed yourself.

As a Singleton, there isn’t another breadwinner in the home to supplement your income. It’s all on you, which is both a blessing and a curse. It’s a blessing because you don’t have to save as much money. It’s a curse because you do have to build and reinforce your safety net all by yourself. It’s my experience that the unexpected expenses of life still crop up while you’re building your cash cushion. It won’t always be easy but you’ll have to find a way to save money and also have funds to cover unexpected items without relying on debt.

The cash cushion won’t be built overnight. Depending on how much disposable income you have, it could take you weeks, months, or years to set aside a big ol’ bucket of money. Do not let that deter you! Trust me when I say that this is a goal worth pursuing – no matter how long it takes!

Never ever forget that money is the barrier between you and poverty.

Not all healthcare expenses are free

We Canadians pride ourselves on our free healthcare system. However, I’m the first to admit that the Canadian healthcare system is not perfect and that there are challenges which will get worse as more and more of us age and try to access the resources and services simultaneously. However, it’s still better than the experience of our neighbours to the south – we are far less likely to go bankrupt for want of a bandaid…

 

Today, I’m positing that even Canadians need some emergency money set aside for medical expenses. Sometimes, we delude ourselves into thinking that we don’t need to pay for expenses related to healthcare. Hogwash! There are some expenses which arise from healthcare and they have to be funded just like everything else. And since these kinds of expenses are unanticipated, a healthy emergency fund should be in place so that the money is already there when you need it. I’m not talking about regular prescription co-pays, which should be accommodated in your monthly budget. I’m not talking about any health insurance premiums that you may have to pay, since these should also already be a line item in your budget. You know in advance that you have to pay these expenses so you can plan for them ahead of time.

 

Nope! Today, I’m talking about the sneaky and indirect health-related costs that can spring up at any time and without warning yet must still be paid.

 

Back in 2014, I took a trip to Vegas and had a very good time until I arrived at the McCarran airport to fly home. My right Achilles tendon started to cause me significant pain with every step. I tried to minimize my walking through the airport, but the pain was still there when I landed and had to get off the plane. I had a few days off before returning to work so I kept my leg elevated and applied an ice-pack. I’m not a doctor – I don’t even dress up as one at Halloween! Needless to say, my home remedies did not work and I eventually had to visit my primary care doctor. Her time, attention and expertise were all free  – thank you Canadian healthcare system!

 

My doctor ran some tests and told me that I’d likely sprained my tendon. She advised me to avoid any weight-bearing on my foot for a few days then I could start walking on it a little bit after 5-7 days. After that initial period, I could gently increase the amount of walking that I did each day. No weight-bearing meant using crutches to get around – not fun, but not impossible either.

 

Now, I normally commute to work by bus. I’m not a fan of rush hour traffic and the bus is convenient. Riding the bus allows me to have a little catnap after work before I arrive home. It’s also a lot cheaper than monthly parking. (The money I save on parking funds my travel, i.e. travel such as the trip to Vegas where I somehow hurt myself!) The only problem with commuting while on crutches was that my closest bus stop is roughly a 5-minute healthy-tendon-walk from my office. As I wasn’t terribly fast on my crutches, I knew that my injured-tendon-walking time would be a lot longer than 5 minutes so I chose to drive to work and to park in my office building, a whopping $13/day at the time.

 

My injury did not heal nearly as fast as my doctor had predicted. When day 7 rolled around, I still couldn’t walk the distance between my parked vehicle to the bus! I still needed my crutches so I made the decision to pay for parking until such time as I could walk comfortably.

 

It took me 5-6 weeks before I was confident that my tendon was strong enough to let me get through the day without being hobbled by mid-afternoon. This meant that I had to shell out several hundred dollars for parking fees! While parking is not technically a health expense, it is an example of how health issues can result in unexpected expenses. If I hadn’t had an emergency fund, I would have been funding those parking expenses with my credit card.

 

Another example of unexpected expenses related to healthcare is visiting people in the hospital. When my mom has gone in for surgery and has been required to stay in the hospital for a few days, I’ve paid close to $100 in parking fees for 3-4 days’ worth of visits. I’m convinced that the streets surrounding the hospitals in my city are worn down faster than every other city street because visitors spend many hours driving around in search of a free parking spot. Each of my hospital visits started with the mandatory loop around the hospital in search of an elusive free spot. More often than not, my search was futile and I found myself standing at various parking meters trying to figure out how much time to buy. Thankfully, I live in the same municipality as my mother so I didn’t have the added financial burden of travelling out of town, possibly staying in a hotel, and missing a few days of work in order to be with her.

 

What about injuries that don’t require a trip to the doctor or hospital? In 2016, I hurt my thumb so badly that I couldn’t concentrate. (Again, I have no idea what I did to myself!) It was impossible to pick up items and any movement caused pain in that digit. I was afraid to drive my 5-speed because I wasn’t confident that I would be able to work the stick-shift in case I need to complete an emergency maneuver. I went to a medical supply store and bought myself a hand brace. Relief was immediate and I happily handed over my money.

 

Thankfully, I had the money in my emergency account to fund all these unexpected purchases. I wasn’t forced to borrow money in order to get to my office, to visit my mother, to find a non-prescribed solution to my injury. I’d had the foresight to put money aside for an emergency. When those emergencies showed up, I was ready financially and I was easily able to weather the added strain on my finances without going into debt. My focus was properly on healing the injury without the distraction of wondering how I would pay off credit card debt.

 

Medical emergencies will happen. They will never be at a convenient time, nor will they give you much, if any, warning. However, I can promise you that they will result in some sort of impact to your finances. If you’re lucky, the financial impact will be minimal. If you’re not so lucky, then you’ll need to have a larger cash cushion to get you through the situation. (And if you don’t already have short-term or long-term disability insurance, then get a policy in place sooner rather than later!) I strongly urge you to start funding your medical emergencies now by putting money aside in your emergency account.

 

Trust me when I say that you won’t regret having the money in the bank when you need it!