Payday #3… a personal lesson in emergency funds

As promised, today is check-in #3 on my road to debt repayment and financial independence.  Two weeks ago, I planned to stick to a $360 budget. Here’s how I did.

July 12-26, where my money went: 

💅$50: Nails.  I have decided that even though manicures costs me $850/year, they are not a ‘need’, and also an obvious area for cost cutting (it’ll add up to $25,500 over 30 years 😬), I’m going to stop including the cost in my bi-weekly reporting and treat it as a fixed expense. Call me crazy, but a little bit of pampering in my life is worth it to me, so this is an area of ‘lifestyle inflation’ that I’m (happily) keeping.

🎁$79.36: Gifts. Three very thoughtful birthday presents  and two ‘congratulations on your new job’ gifts to be exact.  Who says ya gotta spent a lot to give a lot? That said, I know that these were not necessary expenditures and that I should challenge myself to being even more creative from now on.

🥫221.33: Groceries. This is two-times more than I budgeted, mainly because my house-mate was not able to make it to the store this week. The next two weeks should see my grocery bill be pretty low as a result.

🍴$59.31: Restaurants. Yep, could have cut these costs for sure. Three lunches out for someone on a budget doesn’t add up.

⛽ $60: Gas.

🔨$75: Side Hustle. I mentioned that my side hustle  wouldn’t have a start-up cost. Not to sound like a certain famous president, but what I meant was ‘would’.  I have most of the required material and supplies  from years of upholstery, but I needed quality pieces to reupholster and sell! This purchase was for 5 antique chairs that I picked up for $15/each at a moving sale. If all goes well, I should be able to get $800- 1200 for them, so not a bad investment.

For a total of $545 which is $185 over budget.

I didn’t hit my goal of $360 with change to spare.  I know where I went wrong. I didn’t actually make a plan like I said I would… I just decided to make more of  a conscious effort not to spend money, but then ignored this decision when I wanted. Lesson learned (?).  I  still did (a little) better than last check-in and spent $315 less than what I normally would have.


Where my money is going:

  • $0: Emergency Fund. Read below to learn why… ugh.
  • 🎉$491.67 FINAL student loan payment 🎉
  • $120: minimum  payment including $15 interest.
  • $850: A/C repairs for my rental unit…
    • I got a call from my tenants last week  that the air conditioner on the main floor was not working. Since this is a condo, most repair expenses are covered by condo fees. 😃 Except for the air conditioning units. 😞 Long story short, I got two quotes to repair the wall mounted unit and the verdict was $7000: the unit was too old to be repaired which meant a replacement of the entire system (both floors) with a ductless heat pump (because no one does stand-alone A/C anymore).

Seven thousand dollars

    • Technically, this would be an opportunity to upgrade the antiquated A/C system to a more efficient cooling AND heating system, but I don’t live in the house and I don’t plan to sell anytime soon, so a $7000 investment in a new system just doesn’t make sense for me. I do not have that kind of cash, and I am committed to not taking on another penny of debt.
    • Since I am required by the lease to provide air conditioning to my tenants, and they have a heating system that works fine,  I decided to instead install a portable A/C unit that can fit in a window (with some Plexiglas adjustments).
    • All said and done, it should cost me under $1000 to fix. While this is significantly less than the $7000 price tag of a new system,  it still sets me back on my emergency fund goals. On the upside, at least I’m using the money for an actual ’emergency’ (unlike garden beds).

New Balances:

  • Emergency fund: $225 (down $400)😞
  • Debt: -34, 473.49  (that’s a total of $1,679 down in 5 weeks)

Plan for the Next 2-weeks

I budgeted $470 spending money for the next 2 weeks because I am leaving town. I could cancel these mini-trips, but I haven’t completely rid myself of the YOLO attitude; the investment of quality time with friends  and family is worth it to me.

That said, I gotta double down on the side hustle, and quick!

The experience of such a large unexpected expense has been a wake up call. I don’t know why I have never felt it important to have an emergency fund… likely because I would normally just use my line of credit as a back-up. Honesty if I had not been blogging about this process, I would have gone ahead with the A/C replacement and added another $7,000 to my debt-load.

This time is different though.

This time,  I am committed to wiping out my debt, building an emergency fund for times like these, and saving for the future (first stop: $7,000 for a new heating/cooling system).

For now, I’m going to keep taking it one day at a time.

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