Thursday, 16 May 2013

Rainy day fund.

Our financial budget is tight.  At the end of the month we are not lucky to have a big fat cushion of ‘spare’ money, the money we have coming in and going out is snug.  Our tight cash flow does not allow us to enjoy luxurious and treats, it allows us to ‘live’ and that’s about it.  We try to be as frugal as possible in the attempt of making our money stretch a little further.  When possible we put a little bit of money aside to save for treats, days out and for rainy days when unexpected bills and financial emergencies arise.  As our cash flow is far from being vast when rainy days of unexpected financial problems hit us we often do not have the ‘spare’ money saved ready to help cover these costs.  Following a recent unexpected hit to our cash flow we have discussed taking a look at credit card deals with the idea of perhaps getting a credit card with a low limit as a back-up if another unexpected bill hits when our monthly cash flow is particularly restrictive.

We have been considering the idea of getting a credit card for emergencies after a big unexpected bill recently put a huge strain on our money, having a knock-on effect on other bills and being able to have some spare money for little treats for Bug. 

Our money was already tighter than normal after Lee had to make an unexpected trip to his family in Leeds due to a family bereavement, with the cost of travelling there and back taking a big chunk out of the little amount of money we had managed to save for rainy days.  Following Lee’s necessary but unexpected trip away we were left with a tiny amount of money saved.

With our fund of saved money looking worse for wear we were hoping to save some more money over the coming months and make our ‘rainy day’ fund look a tad plusher.  Before we could get our ‘rainy day’ fund looking healthier we were hit by a big, unexpected cost. 

Our car started having a few ‘issues’.  After being looked at by a mechanic friend the diagnosis was not good.  The ‘issues’ were big, costly ones.  With the cost of fixing the car, putting it through the upcoming MOT and the impending cost of the car tax due at the end of the month we were looking at a huge bill to have our car back on the road.  As our car was bigger than we needed and costly to run and keep on the road we decided that it would be cheaper for us to get a ‘new’ used car than do all we needed to put the current car back on the road.  As well as being a slightly cheaper option now we also thought that it would work out financially better for us in the long run as a smaller car would be cheaper to run, insure and have a smaller car tax cost compared to the current car which was very costly to tax.

Even though getting a ‘new’ car would stretch us financially to our limits living where we do having a car is a must.  We live miles from any form of public transport and shops.  A car is essential for being able to get to work let alone to get anywhere else.  Once we had decided to get a new car rather than fix our old one we set about looking for a cheap, small car.  We did not want to get any cheap car but one that would suit our needs and be cheap to run.  Even though we did not want to rush into buying a new car, we did hope to find one as soon as possible as our old car was in limping mode and it was difficult getting lifts everywhere from friends and family.

We found a little car that we thought would be perfect for us.  It would be cheaper to run and as it was being sold at a local garage it would save us the hassle of having to travel miles look at cars.  Unfortunately it was a tad over the budget we had of available money we had managed to scrape together.  As it was a great little car and even though slightly over our budget it was brilliantly priced for the age and condition it was in my mum offered to lend us the amount we were short so that we could buy the car. Thankfully due to my mum’s generosity we have a new car and are once again safely on the road.

If it was not for my mum’s kindness and being very frugal to scrape money together we would not have been able to deal with this predicament that hit us financially.  It is because of the current unexpected financial difficulty that we are considering getting a credit card just in case we have a similar problem in the future.  We do not want a credit card to rely on for a day to day basis but for cases of emergency when money is particularly tight and we have no or enough saved money to take some of the financial strain off of us.  At the moment getting a credit card is just an idea as a rainy day back-up….we may get one, we may not.  Fingers crossed that we get lucky and win the lottery instead and have a big win to take the strain off of us financially and a big, fat cushion of winnings as a rainy day fund. 

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