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Can you afford a $1,000 unexpected expense?
- Thread starter Z-oo31
- Start date
Still living paycheck to paycheck in my 40s, so anything unexpected (like that $4,000 IRS bill we got not long ago) ruins my life.
first post nails it. It's the boat I'm in, and it's a very new one. I spent five years as a professional (non games) broadcast journalist earning barely over minimum wage. Before that, I worked part time in group homes and people's private homes, assisting developmentally developed and elderly adults to pay my way through university. Now, after news killed my soul, I am in sales and I earn what I consider offensive levels of money, coming off a job I thought would be meaningful yet failed to pay for a roof over my head.
20 years ago that level of sudden expense would have been serious "WTF do I do now!??!".
But sudden expenses were a way of life for my family a few years back with lots of medical expenses for my daughter that came on quickly (she is fine now for those curious). Since then, we always make sure never to over spend or over commit our money. I consider myself lucky to be able to maintain a large cash "emergency" fund, and a few high limit credit cards with zero balance in case things get REALLY crazy.
If you can afford to have an emergency fund, I highly recommend it for peace of mind. I would think $1000 would be a minimum, more the better though. Depends on your situation.
I hope people just don't have to worry about stuff like this though. It sucks.
But sudden expenses were a way of life for my family a few years back with lots of medical expenses for my daughter that came on quickly (she is fine now for those curious). Since then, we always make sure never to over spend or over commit our money. I consider myself lucky to be able to maintain a large cash "emergency" fund, and a few high limit credit cards with zero balance in case things get REALLY crazy.
If you can afford to have an emergency fund, I highly recommend it for peace of mind. I would think $1000 would be a minimum, more the better though. Depends on your situation.
I hope people just don't have to worry about stuff like this though. It sucks.
Funny this pops up.
Just got a bill in the mail for $1K and no idea how we are going to pay it. Can't even afford the minimum monthly payment (with late charges added) of $300.
Just got a bill in the mail for $1K and no idea how we are going to pay it. Can't even afford the minimum monthly payment (with late charges added) of $300.
I like that list :)
1. Check
2. 80% check (wife has PHD debt still)
3. Check
4. Check'ish? 401k through work, rest of investments are weak... need to get better.
5. Check - Done and done, daughter got her Masters last year (Proud dad!)
6. Will be paid of in 4 years, can't wait!
7. Always generous where we can be. Working on investments but still learning.
My wife gets worried about investments, so we play it safe and with small amounts. Maybe when house is paid off in a few years we can be more aggressive.
Nope lol. I live off of like 700$ a month. Luckily my medical and dental is paid by the government(until it implodes) I'm really hoping the transmission in my car does not go out or something because then I would be screwed
I try to keep enough savings to cover 3 months of expenses so I do have enough in my bank. I also have credit card debt that I'm paying off (no interest). I voted no since I already have debt.
Yes, we currently putting any money we can scrounge up in to paying down our debt, but we have a small emergency fund to cover little things. After we pay off our debt we are going to build a larger emergency fund.
Working as a contractor pretty much my whole life, and seeing a lot of layoffs, I've adjusted spending habits to make sure I save money that I can live off of in the event of unexpected expenses. Do not want to go back to living paycheck to paycheck..
Yes. I'm fortunate that I save a ton by being a fairly boring person (i.e. I don't spend much money because I only buy essentials; I'm not into fancy clothes, vacations, etc.), so I have a decent amount in my savings.
Years ago I thought having $3000 in my checking account was great. I'd never ever let it go below that. Then I went back to school, quit my regular and lived off substitute teaching. Well school didn't quite go as planned as I changed my mind about wanting to teach and so here I was with basically nothing to my name. I struggled hard until I was lucky to find the job I'm at now and work my way up. I now feel sick if my emergency fund dips below $10,000
I realize how fortunate I am, but I also never had children (38 years old) so I also know how much that has factored into this.
I realize how fortunate I am, but I also never had children (38 years old) so I also know how much that has factored into this.
My wife and I make sure we have a buffer of several thousand dollars separate from our actual spending and saving accounts. It takes a while to replenish it once it has been depleted, but it's very reassuring to have.
Genuinely curious how at that age you are paycheck to paycheck. I understand a lot of people are like this but just wondering what obstacles in life got in the way. Do you spend a lot of money? I have friends with combined income of over 150k that live paycheck to paycheck because they buy unnecessary things. Do you have any money saved from retirement. No judging just trying to get some perspective.
I clicked no after looking at my bank account after paying off some debts. Normally I like to keep £500+ available in case of emergency's.
Try to have a slush fund of about 10k to cover anything (car repairs, home repairs etc) at worst I have a CRedit card with high limit and zero balance if I have to float a bill for a while.
Having that much money in a checking account is a bad idea, you're withering the value of it because of inflation.
I make about $2,400 monthly. $1,390 on average in expenses, so $1000 would be about a month worth of savings for me. That said, I'm in deep debt both from studying and buying an apartment.
Yep. My wife and I are in a good place financially, but when we were first starting out on our own, there was indeed a time when a $1,000 bill would have crushed us.
Afford is a weird term. I can't afford buying a take-out salad for lunch but catch me getting extra avocado at Chopt.
Didn't know what to do with my life, so I worked in retail until I was 30 before finally going to culinary school. Been a pastry chef for ten years, but surprise!, it's a super shitty line of work that pays like garbage and destroys your body. Gonna be 41 soon, and can't figure out how to change to a better career when I have neither the time nor money to do so.
And even if this forum was solely populated by Americans, polls like this are always going to be vulnerable to selection bias so you can't take the results as being indicative of everyone who uses the forum.
My savings budget is about to go down to about $1000 a month so If I encountered such an expense I'd charge it to a credit card and just divert my money savings / investing budget money to it for the month. I don't have that much liquid cash most of my money is in investments.
Not being able to afford a $1000 expense is no way to live. I can remember when I was living so tight and I'd just moved into an apartment that when the toilet clogged I had to take my last few dollars and buy a plunger to unclog it. Still have that plunger to this day but buying it I thought to myself never again will I live like this and I haven't.
It doesn't really matter what you make. You need to figure out how to live below your means so that there's money left over.
Not being able to afford a $1000 expense is no way to live. I can remember when I was living so tight and I'd just moved into an apartment that when the toilet clogged I had to take my last few dollars and buy a plunger to unclog it. Still have that plunger to this day but buying it I thought to myself never again will I live like this and I haven't.
It doesn't really matter what you make. You need to figure out how to live below your means so that there's money left over.
I basically read it as "can you cover it without it causing you any further debt?".
Which I could, since I have the money, but generally not in a liquid state, so I would have to use my credit card to cover it while I liquidate some savings. I would then pay off the credit card in full (as always), so it would cost me zero in interest or fees.
I do have a mortgage though, so if I count that I guess I can't cover ANYTHING (since it's money that could be going to paying it off). But my net worth (assets minus debts) is higher than $1000, so... yes?
His financial advice is more for people who lack self control or understanding when it comes to money. Debt can be useful if you can handle it and I use credit cards for all purchases so I can earn cash back on them.
He says silly stuff at times though like "You wouldn't take a paid off house and borrow money against it to invest. That's the same thing as not paying off your mortgage as quickly as you can and using that money to invest."
No that's not the same thing because If I was living in a paid off house right now almost all my income would be free to invest or do whatever with so there wouldn't be much of a point to borrow against the house.
Dave's advice is colored with his own experience mismanaging debt.
When I lost my job and was left disabled, I had to wait over 2 years to get my financial situation in order. I thought I was more than prepared. I had a retirement plan to leech off of, a wedding fund, and just leftover cash. It still didn't cover everything I needed while the government and insurance companies fought to see if I actually was worth giving money for assistance and accident claims. I still haven't received anything, but I have been accepted into disability and will start seeing something next month.
$1000 is probably the bare minimum of an emergency expense nowadays sadly. Two days in the hospital was $10k. Two. My meds without my insurance would be over that a month. It's pretty insane.
I made it through in the end, but there were plenty of times I thought I would have to give up everything I worked for just to survive with the bare essentials. I would implore people to save as much as they possibly can, and, if you are better off like I was, send money to places for people who need that help drastically.
$1000 is probably the bare minimum of an emergency expense nowadays sadly. Two days in the hospital was $10k. Two. My meds without my insurance would be over that a month. It's pretty insane.
I made it through in the end, but there were plenty of times I thought I would have to give up everything I worked for just to survive with the bare essentials. I would implore people to save as much as they possibly can, and, if you are better off like I was, send money to places for people who need that help drastically.
Sure. I don't think there's anything wrong with using credit cards and then paying them at the end of each month assuming you have the self-control and proper budgeting for it. His own experience of ruining himself with credit card debt certainly factors in his advice, but I don't think he is entirely off the mark. Most people, to be honest, lack the self-control with their finances and budgeting to be able to use something like a credit card appropriately. Yes, there's people who can use them responsibly, but the vast majority can't, so it makes more sense to tailor the advice towards the majority. Everyone wants to think they're special, and if you tel people there's a special case where if you're smart enough, wise enough, etc that you can make it work, everyone will think they're that person and try to make it work even if they aren't.
His big thing is people having a paid-off house. I agree with you that it isn't a fair comparison, but I'd still suggest paying off a house before doing something like investing in a real estate deal, etc.