Maybe it’s just me, but since prioritizing taking care of my finances and beginning the path to financial independence and hopefully retiring early, I regularly worry about having a major expense pop up that completely destroys the progress I’ve made in this area of my life. I’m an emergency management planner full time, so constantly thinking of the worst case scenario might just be ingrained in me. We all know that life does not always work out the way we intend. The saying, “Man plans, God laughs” has rang true many times in my life.
I hate being pessimistic but I try to live realistically and always have a contingency plan. That’s the whole point of creating an emergency fund – we know bad, expensive things can happen, so having a cushion can help us bounce back from a financial setback. I’ve been working hard to build up my emergency/home savings fund further because I’m afraid of needing to use it for a major expense. For example, I went on a vacation to Hawaii in May. Two days before my trip, my water heater rusted out and flooded one room in my basement. Of course it happened on a Sunday (the least convenient day of the week) so my plumber had to make a weekend house call to replace it. I had no idea what to expect to pay for something like this. The total bill ended up being about $980. Fortunately I had saved up close to $3,000 in my emergency fund so I was easily able to cover this cost without making payments or charging it on a credit card. In looking back, I definitely should have noticed the warning signs and paid closer attention to the water heater because I could have easily predicted this and replaced the heater on my terms before it flooded my laundry room (and not on a weekend).
I tend to notice that both good and bad things happen in threes. This recently happened in August – I landed a nanny/house sitting gig which paid me $600 for taking care of the kids and household from Monday through Friday, I received my first contract to teach a course as an adjunct faculty member, and I had just finished paying off my student loan. While I was thrilled that all of these good money things were occurring, I knew it wouldn’t last forever so I was waiting for the other shoe to drop. Lo and behold, a forgotten about medical bill from February popped up requiring payment, my insurance company told me I needed to build a railing around my deck because the deck was too high off the ground, and I also had to cancel my trip to Europe. Allow me to sidetrack this post a little bit to tell you about that saga…
Several months prior, I decided to take a solo trip to Europe in September to celebrate the completion of my master’s degree and expecting to pay off my student loans by the end of the summer. I decided I wanted to visit Slovenia and Romania, as they are countries you don’t often hear about yet are beautiful and have some fantastic outdoor and cultural experiences to take in (two of my favorite things to do when I travel). My passport was set to expire in January 2019, but an entry requirement for both countries was that your passport be valid for three months past your expected date of departure (since I was traveling in September, three months’ validity would put me at December 2018). I thought about renewing my passport ahead of time, but decided to use it one last time and just wait until after this trip.
I booked my flights, lodging, and travel insurance in case I fell ill before the trip, and arranged for transportation to/from the airports in both Ljubljana and Bucharest. A few days prior to my scheduled departure, I was doing some last minute planning online. Just for kicks and giggles, I decided to check out the passport validity requirements for Germany, where both my outgoing and return trips had a layover. I froze when I saw they require six months’ passport validity to enter the country. I contacted Condor Airlines who confirmed that I would be denied boarding to Frankfurt in Minneapolis because my passport would not be accepted in Germany. Long story short, there was not enough time to rush a renewed passport to me and because Condor Airlines is based in Germany, all of their flights from the U.S. to Ljubljana had a layover in Germany. So, I had to cancel everything.
I was able to get a refund on my lodging and travel insurance but lost out on roughly $900 in airline tickets. Definitely a major screw-up on my part. Now I understand why the U.S. Department of State strongly recommends you have six months’ validity remaining in your passport before leaving the country. I also learned that because of the Schengen Agreement, some European countries assume you will stay in the area for the full 90 days you are allowed without a visa, regardless of what you tell them your departure date is, so they expect your passport to be valid for three additional months past the initial 90 visa-free days – another reason for ensuring your passport has six months’ validity. I learned my lesson from this trip and recently received my renewed passport in the mail, so hopefully in 2019 I can put it to good use.
Now, back to the main point of waiting for the other shoe to drop. My furnace is getting up there in years but still works fine. I’m terrified of waking up one freezing winter morning in South Dakota (it gets COLD here) to find a non-functioning furnace. Right now, between my emergency fund and my home improvement project fund, I could probably fully finance a furnace if I absolutely had to (if not, I would be awfully close). While I’m so thankful I’m on this journey to financial independence and I appreciate how my finances have improved, I feel as though I tend to obsess over every little finance-related thing in my life now.
It reminds me of a couple years ago when I was actually a relatively healthy person. I had lost 65 pounds, was able to run 5ks straight through with no walking, and planned out my meals to ensure I was eating nutritious foods the majority of the time with only little “splurges” here and there. While overall this shift greatly improved my quality of life, it really caused me to obsess over numbers like calories/Weight Watchers points/Fitbit steps, etc., which was not the healthiest mindset.
I think the most important takeaway for me is to remember that balance is crucial with everything. I won’t reach my goals without hard work and dedication, but worrying and obsessing over every little thing is not healthy, either. With weight loss, allowing myself a rest day or two every week was critical to my recovery. I could eat a slice of chocolate cake for a special occasion and still be healthy. It wouldn’t ruin my progress and I was still way better off than I was the year before. With personal finance, I must remind myself that the point of an emergency fund is to have a cushion in case of emergency. If I need to use it, that’s okay! Even if I drain it because of an emergency, I’m better off than I was the year before where I wouldn’t have been able to come up with the cash to pay for the emergency. We can’t plan for or predict everything.
Did you notice a similar pattern once you became more concerned about personal finance and spending? Or, did you experience the opposite effect? What are your tips for maintaining a healthy balance between working towards your goals but staying sane? Let me know in the comments!