Over the past two months, we’ve watched as a series of devastating hurricanes battered Florida and the Gulf Coast. My heart has gone out to the numerous homeowners and businesses along the path of these storms. Total damages are still being determined, but cumulatively will likely top $10 billion.
The most devastating storms are those that come out of nowhere. As I reflected on the families who were facing huge challenges, both physically and financially, I was reminded of the storm I found myself in. Mine also came from Florida in the form of a phone call that arrived suddenly one September. The chilling winds began to blow as I learned tests had revealed the dreaded six letter word, c-a-n-c-e-r, for my father, a widower. Within hours, I was flying to Florida to be by his side. The diagnosis was bleak. As events unfolded, Florida became my home for most of the next five months. Without warning, our two-income family was reduced to one income. This, coupled with the additional travel and personal expenses, totally depleted our emergency savings fund. I'm not complaining -- I'm very thankful we had an emergency fund to fall back on!
You see, one of my part-time responsibilities here at Sound Mind Investing is the Reader Services line where I answer questions about SMI and our financial philosophy. Many, many times I have had the opportunity to emphasize to others the importance of having an emergency savings fund in place, and invested in such a way that you can get the money easily. Of course, I had no idea that events would transpire so that our family would be especially in need of one. It's a good thing I "practice what I preach"!
This experience has caused me to consider what a blessing SMI has been to our family over the years. Before I came to work here, my husband Rob and I were subscribers. If we hadn't heard about this financial resource, would we have made the sacrifices necessary to get debt-free if we weren't reminded monthly of its importance? Or, would we have made the building of an emergency fund the priority that it became? I doubt it.
Let me encourage you to take a fresh look at your entire financial plan, and especially your savings strategy:
• Even if you've not yet fully retired your "Level 1" consumer debts, it's still smart to be putting some money aside each month for your "Level 2" savings.
• Is your emergency fund target amount adequate to carry your family through three to six months of difficulty?
• Have you shopped around to find the best deals in money market mutual funds or bank CDs?
• If you've had to draw from your savings due to an emergency, have you made it a priority to replenish your fund as quickly as possible?
Rob and I made the sacrifices necessary to rebuild our contingency fund as quickly as possible. We look at following SMI's biblically-based principles as "storm insurance." Jesus said there would be storms in every life (Matthew 7:24-27). Unexpected phone calls come, needs change, companies downsize, refrigerators break down and family members do get sick. Things that we don't like to think could happen to us, sometimes do. Be diligent and work hard to make sure you lay a proper financial foundation. Put into practice the wisdom (Proverbs 24:3-4) God makes available to you in preparing for the unexpected.
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