What would you do if you received a surprise bill for $5,000? Would you crap a load, like me?
How about $4,000, $3,000, $2,000, $1,000, $750, $500, $250???
What is your pinch point? Which one of these numbers made you uncomfortable?
I believe one of the most effective ways to reduce stress is to have an "Emergency Account".
For alot of people that is a line of credit. Which works when you have nothing else to go on.
HOWEVER, imagine for a moment if you had an account that had $5,000. No transaction fee, no interest to pay for borrowing the money. Heck if your lucky you might even be making 1-2% on the money. As much as it would be painful to write that cheque. You could do it knowing you are in no way effecting your daily living expenses.
It was one thing that my hubby and I took a serious look at. We looked for a No Fee Savings account and then decided on an High interest Investment Account and started an automatic transfer to that account. We were surprised how quickly the amount adds up. You will be surprised how much burden and worry is lifted off your shoulders. Every month as the amount was deducted I felt a pinch. But the day we unexpectedly had to replace two tires on our vehicle and could pay for it out of that account...I heard the choir singing Hallelujah!
Never before in our life had we been able to handle an emergency expense by just writing a cheque and being done with it. Let me tell you....it felt so good...I felt happy. No credit card, no line of credit, no paying interest for a few months till we could pay it off. Just write a cheque and its done. Pure awesomeness!
For us it was one step that brought us closer to balance.
What would you do if you got a surprise bill for $5,000?