Comments on: The Personal Finance Toolbox

By: DDFD at DivorcedDadFrugalDad

DDFD at DivorcedDadFrugalDad — Tue, 01 Sep 2009 16:44:34 +0000

Nice analogies– problem is too many people refuse to open the toolbox until it’s too late and the proverbial basement is flooded.

By: Debbie M

Debbie M — Mon, 24 Aug 2009 21:03:58 +0000

Craig – I’d say an emergency fund is for whatever counts as an emergency to you. Since you have a separate fund for maintenance, a broken refrigerator would not be an emergency for you.

I don’t even have an emergency fund–I do have funds for a) home maintenance and repair, b) car maintenance and repair, c) my next car, d) vacations, computers, and other expensive fun stuff, e) retirement. I also have a (still smallish) fund for health emergencies. I have a pretty secure state job, so I don’t actually have a fund for unemployment, which is how a lot of people think of emergency funds. If some other sort of emergency came up, I would raid those other funds.

More refrigerator death strategies:
* buy used
* hold out until your next paycheck to give you time to research a good deal by:
– using a cooler
– borrowing a friend or neighbor’s fridge (maybe you can cook enough for them a couple of times)
– eating only non-refrigerated foods
– storing things outside (if it’s winter)
– renting

Also, you can actually fit a baby into a pretty small place for a while–a lot of parents even sleep in the bed or room anyway.

By: tentaculistic

tentaculistic — Mon, 24 Aug 2009 15:26:10 +0000

I know it’s not the point of the post, but I think a lot of people have crises and think to buy new rather than to look on Craigslist. For heaven’s sake, a fully functional name-brand non-clunker refrigerator on Craigslist can cost $100 (rather than $600-$2000)!

By: Andy

Andy — Sat, 22 Aug 2009 20:19:43 +0000

Craig @#7 — I think of my fund as a reserve to use for large non-luxury goods and emergencies. So a fridge would count, but a new computer (or bike or grille) would not. I have used it to buy new cars before.

Our emergency fund is in two layers — we have at least $1K in the bank, plus at least $30K in a money market.

By: Rachel

Rachel — Fri, 21 Aug 2009 15:45:05 +0000

Craig, our savings and emergency fund is in a lump sum. but we used to pull from it for travel and vacations. I started depositing into a seperate savings for that. I just couldn’t see a pleasure trip as an emergency. Of course when my fil passed away a few months ago, the travel expenses and the cost of the funeral (he had no insurance), came from the emergency fund. We are planning to save for future vehicle purchases, so I am thinking a seperate account for that is a good idea. But I would buy an appliance from the emergecncy fund.

By: Chris

Chris — Fri, 21 Aug 2009 15:06:15 +0000

The “Thirty Day Rule”

I do this with almost everything, not just “major purchases.” When I see something I want, I take note. If I think of it again and it’s approximately a month later, then I buy it.

Sometimes I use SavvyCircle.com to notify me if the item goes on sale. This has the dual benefit of giving me time to think about it and getting me a deal. Almost everything goes on sale eventually.

By: Wendybird74

Wendybird74 — Fri, 21 Aug 2009 13:44:04 +0000

Apparently Trent can read more than one mind!

Just a few days ago I ran into a problem with my electric. Our rainy weather here in the northeast caused serious humidity problems in my basement where the panel is located and basically fried it! (Yes I have a dehumidifier…but it just can’t keep up with our weather.)

Thanks to reading TSD, several months ago I set up an automatic deduction savings account (ING) as an emergency fund. Now, low and behold, I have an emergency!

It is a reasuring feeling to have the ability to fix the problem without using the plastic and getting deeper in debt, but I’ve been worrying lately on how I will replenish it.

Now I know….ramp up the frugality that I have been relaxing for the summer.

Thanks again Trent!

By: craig

craig — Fri, 21 Aug 2009 13:03:21 +0000

I am curious to hear what people use their emergency funds for. To me, a broken refrigerator (or any appliance) is not an emergency, but something that should be planned for as a maintenance item (appliances get old, they stop working, you need new ones). I have a seperate savings account that is supposed to be used for these things.

My emergency fund is only for real emergencies – loss of a job, serious medical issue, or ???.

I guess it is all your money and all in savings, so it realy doesnt matter. Maybe it is just a psycholgical thing for me to keep them seperate…

By: Julie

Julie — Fri, 21 Aug 2009 12:50:59 +0000

Hi Trent,

Here’s another one of those meals for under 10 bucks – http://www.time.com/time/specials/packages/article/0,28804,1819754_1819753_1819750,00.html

By: mellisa rock

mellisa rock — Fri, 21 Aug 2009 12:49:25 +0000

I really want to thank you for this post. My husband and I got a smack of reality about 18 months ago when we applied for a house loan and were turned down. We have been using some of these tools and I am happy to say that we have reapplied and while still waiting to hear, it’s a much better experience this time around. Steady behavior is what we struggle with most. At the end of the month we want to reward ourselves for doing all the good in the first of the month. Next month I am going to put the extra in my savings. Thanks so much.

By: David/Yourfinances101

David/Yourfinances101 — Fri, 21 Aug 2009 11:05:44 +0000

Along with “frugality” how about the proper mental mindset in general? When I was getting out of debt, I found that changing my behaviors and mindsets towards the money in my life in general went a lot further than simply trying to turn down the AC everyday.

Revamp your personal perspective on money and most everything else will eventually fall into place.

By: katie

katie — Fri, 21 Aug 2009 09:07:53 +0000

If you don’t have a fridge, find a friendly neighbor?

By: Brittany

Brittany — Fri, 21 Aug 2009 03:10:02 +0000

I think if you don’t have a refrigerator, the set of tools you need might be different. =D

Good post.

By: Bill

Bill — Fri, 21 Aug 2009 02:49:26 +0000

Great tool:

Don’t finance a car (especially a silly prius)

By: Sheila

Sheila — Fri, 21 Aug 2009 00:50:02 +0000

You’re just going to have to get up earlier, J.D.

By: AnKa

AnKa — Thu, 20 Aug 2009 23:44:50 +0000

The beauty of having many tools is also you don’t have to be good at every single one of them! There’s many ways to make a difference, and sometimes different people in the family can contribute with one tool each. My husband is brilliant at being ingenious about prolonging the life of the refrigerator. In the meantime I do a ton of research about the exact new fridge I want and can afford (and figure out how to pay for it).
Together = awesome teamwork, happy family, and eventually a new fridge that is paid for and didn’t cause a fight. Because I got the one I love and the husband got the satisfaction of really really believing the old one had run its course.

By: J.D. Roth

J.D. Roth — Thu, 20 Aug 2009 20:55:33 +0000

Bah! Trent, you’ve done it again. You’ve reached into my brain and scooped out a post I’m working on. Only this time, you’ve done it in a big way. I’ll put my own “personal finance toolbox” article on the backburner now, I guess.

(For those who don’t know, Trent and I seem to have some mysterious psychic connection which causes us to write about the same topics at the same time. It’s scary, actually.)

By: Emily

Emily — Thu, 20 Aug 2009 20:06:40 +0000

Should “But what if you don’t have a refrigerator?” read “But what if you don’t have an emergency fund?”