Broke Now vs. Broke Then

It's been awhile since I've done a debt-proof post.  It's time.

I mentioned the other day (yesterday?) the fact that we're broke.  Again.  This needs some clarification.  I also need to share that Pa called from the dentist yesterday.  It went something like this....

mrphphmeahmampphgrrmmm900muckshmrphs

I said, hello. hello. did you say 900 bucks??? You must have the wrong number.

He went to the dentist thinking it was going to be $400.  Halfway thru they decided, ah heck, let's do two crowns, that'll be 900 bucks.  Out of our pocket.

Which kinda sucks. (I don't let my kids say 'sucks' but sometimes I type it.  Don't tell them, okay? It seemed fitting here)

But it's okay.

And it got me to thinking that broke now is different then what broke was three years ago. 

Now - there are a few schools of thought on the funding and goal of the emergency fund.  As I understand it, Dave Ramsey teaches that the emergency fund should be $1000 and all other money should be used to pay off debt.  Mary Hunt, on the other hand, teaches that this fund should be the equivalent of six months pay.   Mary's thought is that you would quickly fall back into the debt if you don't have an adequate safety net.

In talking to different friends and family, I think that which way you go on this has a lot to do with what experiences you've had in your life, the nature of the economy where you reside, and your own personal feelings and matters of discipline.

Let me tell you something.  When I sit on my front porch - I can see all 14 homes on our short street.  Of those 14 homes, three are in foreclosure, three others have been for sale and not sold at some point in the last three years, and at least five are waiting for the market to turn so that they can slam their homes on the market and hopefully move. That would be us. 

I believe Mary Hunt.  I believe for where we live, in a society fueled by the automotive industry, that our jobs are something to be daily thankful for because too many of our friends have recently lost theirs.  The economy here is to not something to take lightly and a backup plan is a necessity.

Ironically - altho I believe Mary's train of thought - we just can't seem to keep our fund much more than a thousand bucks.  It makes me laugh.

But.

What I'm getting to in my longwinded rambling way is that the emergency fund helps.  While we pretty much completely drained it and put it into Pa's mouth yesterday - we did not go in debt. That is the difference between being broke now and being broke three years ago.  Three years ago we would have gone further in debt over that bill. Today, we're just hoping we don't have an emergency and our thoughts of traveling for Christmas are seriously on the line.

And broke, and in debt, are two very different things.  I'll take broke anyday.

Comments

[andie]

ouch! $900!!! i agree with you broke is so much better than in debt. We just paid off our credit cards and started throwing money in savings...i dont feel as stressed knowing we may not have a lot in savings but we having no credit card debt

[elizabeth]

Ouch - sorry about the 2 crowns.

yup, I agree with you. I think the size of a safety net depends on a lot of factors - whether you have dependents, your risk tolerance, blah blah blah. Half of me would be fine with not much of one (assuming no debt) and would love to spend that money on travel. The other half of me likes the idea of having the ability to fund a life change if needed or desired. So far, the half that saves usually wins. :-)

[Summer]

We're broke too. :) I think it par for the course these days, sadly....and where I think most people would agree with you ( and Ms. Hunt ), I think most people's emergency fund are much like yours. I know ours is.
I know Mike and I don't have a *lot* of debt. We have a small amount on a credit card, the cars and the house. We *do* Have an emergency fund. Much like Pa's delimma I too have a crown to be done but since I"m pregnant currently I Have to wait to get it done, so we have to make sure at least 500 dollars is accounted for. Fine, but then today the jeep's back window won't stay up. OR go back down. This would't be a problem but we live in Florida where it rains EVERY afternoon. SIgh. Add in the stress that I'm going to have to stay home after the baby's born and well, you've got a convert on the way to your Debt Proof Living. ( I need to go back and re-read your posts on it. )

[~ Junkyard Jennifer]

Although, that is absolutely not fun, it sounds 'nice' to me at this point in my life. I need to order that book!