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A little epiphany on life and emergency funds...

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...and where they fit in my re-building process and which helped me prioritize them over paying my last two (larger) charge-offs.

 

I’ve been through a lot of crises outside my control. Market crashes (and I didn’t have one of those loans I knew I couldn’t afford), ensuing unemployment, major hurricanes, unexpected tragic deaths, periods of abject depression and then unemployment from those, no family help no matter what, et cetera, et cetera. And yes, this was definitely sad/unfair/tragic and all those things. Hard to understand why these things happen.

 

BUT what happened on the money side is actually easy to understand. The truth on that side is simple. When the paychecks stopped, I didn’t have enough money to make my minimum payments. Not extra payments on a car loan, not 6-month insurance premiums paid up front, or credit card balances paid to zero every month. When tshtf—when we stop eating out and buying shoes—it wasn’t long until I couldn’t even make minimum payments. Maybe a repossession months in to a job loss is one thing (and some will say it’s not), but to think about what it means to earn a 30-day late on $40 minimum payment is pretty sobering.

Emergencies happened, fair or not, and yeah it's hard when you've barely recovered from one disaster and here comes another one. But it doesn't change the fact that my backup plan was that I had no back-up plan. That's the other lesson anyway—emergencies will happen.
Who knows—some crazy unknown virus could start spreading across the entire world killing thousands of people because we have no cure. And maybe it causes the entire economy to shut down...

 

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