Hello again. I am now back at work full time while my husband stays home to look after our son temporarily (here is some more information about Shared Parental Leave). Receiving my first full pay cheque after several months of maternity pay was a welcome relief and I made sure that we went back into full savings mode. This included a £300 lump sum into the Lifetime ISA and slowly increasing the other regular payments I make into our other savings accounts (for more information about how we’re saving for our house, see my previous post on the topic). One of those accounts is our emergency fund.
Now, any personal finance blogger worth their salt will say something about saving an emergency fund (usually 3-6 months of your fixed expenses). There are literally thousands of posts on the topic which I think is part of the problem. It all becomes white noise and you don’t really think about doing it. “Yeah, yeah, yeah, save an emergency fund, but tell me this! How do I become the next Warren Buffett?!”
Anyway, I hadn’t really started our emergency fund until I was about 6 months pregnant and was a bit worried that we wouldn’t be able to afford our rent once my maternity pay kicked in so I began putting money into our regular saver for a rainy day. Thankfully we never needed to use the money towards our rent but we did need to dip into it.
For the past year we had been driving a 1998 Ford Focus. It was old but we had bought it for £600 and it had low mileage and had been running well.
It had breezed through it’s MOT when all of a sudden we started having engine problems. One mechanic suggested it was the clutch so although it was an expensive repair, we got it done as we figured that the car should keep going for a long time afterwards. Unfortunately two weeks later as I was driving home with my son, it broke down again at a set of traffic lights. Thankfully a bystander helped me push it off the road and I had breakdown cover. A friend who lived locally picked up baby and drove him home and I waited with the car until the tow truck arrived. After this breakdown, we decided it was time for a new car. Not the most frugal decision however the repair costs were becoming more than what the car was worth and I never wanted to be stranded with my baby like that again.
Our emergency fund gave us the freedom to put a deposit on a good used vehicle from a local car dealer. The new car is also a Focus but it has a much more efficient engine so we have been making big savings on petrol and also has a lot more safety features which as a new parent does put my mind at ease.
Hope for the best, prepare for the worst and take what comes
We’re thankful that we had the money put aside for a rainy day and have worked hard to replenish our emergency fund. When we one day own our own home, we will hopefully have enough put aside to take care of any unexpected expenses. All I can say is that I no longer ignore those articles about emergency funds, you never know what you may learn!