The reason you have an emergency fund
Last week M’s car had a pretty bad flat tire so she took it in to see if it was patchable or if she needed a new one. The guy at the shop told her that her tire was completely punctured and she would need to buy a new one. That sucks, but not such a big deal, right?
He also told her she still had her original tires from when she bought the car (3–4 years and almost 60,000 miles ago). You’re supposed to change your tires approximately every 40,000 miles.
This was all news to the both of us.
I don’t have a car and know very little about them so at first I was a little skeptical about what this guy was saying. But we did some quick research and found out he was telling the truth. His shop is also well recommended and even M’s boss takes her car there, so we knew that he probably wasn’t shady.
Then he said it would cost her $430 to get all her tires replaced.
Ouch. But after doing some more research, we found out that the range of replacing all four tires usually runs from around $400–$1000. So this sounded like a decent enough deal. Then he tried to sell her some extra warranty for $30 more.
Granted, $30 more when you are paying $430 isn’t much, but I wasn’t sure she needed it. It included any kind of replacement to these tires as well as free rotating every X amount of miles, which I guess is good for the car.
Was M really going to take her car in every now and again to have the tires rotated (and thus getting her extra $30 worth)? No. So there was no reason to get it. Maybe someone else would’ve and in that case it might be worth it, but in her case it’s not.
Now, only a year ago this may have been a big, stressful event for M. Where do you come up with $430 like that? But now that she has a budget, and saves regularly, her emergency fund meant this incident was nothing but a small bump in the road.
This is why an emergency is the first thing you do when taking control of your finances: it keeps you sane and keeps unexpected events from derailing your financial goals. She is not stressed, she is not worried, and life goes on as if nothing had happened.
Do you have a story that made you realize how important an emergency fund is?
February 4th, 2008 at 9:32 am
Umm…if she doesn’t get her tires rotated regularly she’s going to spend another $500 ($430+ taxes) for tires a lot more quickly than she should have to.
Every other oil change is the recommended cycle if I remember correctly.
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