We have moved!

Update! This site has moved to http://www.countingmypennies.com/. Please update your links if possible and come visit the new site! No new posts will be added to this site - all updates will be done at Counting My Pennies. Thanks for reading!

Wednesday, April 16, 2008

Deobligating Emergency Funds

In the past month or so, my budget has been an additional source of stress that I really didn't need. I was over budget in a number of categories, while still trying to work on that YNAB concept of living on last month's income. Things were clearly not going well.

I had also realized that while my work wardrobe was great for the winter, my sweaters were not going to cut it for the summer months and I had to spend some money on some shirts for work. And in another 50 miles or so, I would need a new pair of running shoes.

So I had all that occurring on one Excel spreadsheet. But over here, on another Excel spreadsheet, was the account that I had designated my emergency fund. It very easily had 10 months of normal expenses in it - not just the expenses I would have if I lost my job and needed the emergency fund for 10 months. And this isn't including my normal savings account - this is just the emergency account.

After a stressful day at work, I came home to find the budget spreadsheet open on my computer. And I made a decision. I took $1000 out of my emergency fund account, transferred it to my day to day account, and reworked the budget.

And it was like a weight had been lifted. I was no longer overbudget in a bunch of categories, and I can "splurge" on the $10 charity event on Friday. I can go to the store and buy a few nice, yet inexpensive items to wear to work. I can finally buy the frame for my bar association certificate.

Do I plan to spend all the money this month? Absolutely not. But it's the padding I needed to get me through the expenses flying at me from all directions. Will everyone agree with this tactic? Probably not. But for me, I think it was the right decision. If nothing else, I feel better about my financial situation, and that's what's important.

Plus I won't have to wear sweaters to work in July. Always a good thing.


Tom said...

I think you did well. You bought things you needed. There is absolutely nothing wrong with the frame and the stress relief alone is probably worth it IMO. : )

J. Savings said...

And you know what? you're now on the right track, both emotionally and money-ly! haha...

Losing that stress is key, congrats!