I f you have even been in Atlanta in late May or early June, you know it is already 90 degrees and 80% humidity with the worst coming in July and August. It was not different that day. I had a great day in the pharmacy, and the ten hours seemed to have flown by.
After ten hours of sitting in the sun, the first thing I hit was the A/C button when I started my truck. As usual, I rolled down the window on the driver's side to let out some of the hot, stagnant air. I proceeded to the interstate and started to wind up the window to enjoy the cold, brisk air from the A/C. Only one problem; the air, after several minutes driving, was still warm. Blasting the A/C button did nothing to cool the truck. The next day, I took it to the local Firestone to discover that the compressor was shot. The cost to repair the A/C was $954. While I had an emergency, at that moment, I didn't have a crisis. Why? I have an emergency fund for such unexpected incidents.
Having an emergency fund is critical to avoiding credit card jail. Life is going to happen, and may times it comes without warning. You MUST have an emergency fund. I believe you should save at least 2-3 months of expenses in your emergency fund. If you find that daunting, make it your goal to have $1,000 minimally. Emergency funds give you margin in your budget and allow you some breathing space when the unexpected happens. I have raised two daughters, now 28 and 25 year old respectively. I can't remember a time when either warned me she was going to be sick the next week. I needed to make sure I always had the copay for a doctor's visit.
When there is no margin in your budget and no emergency fund, you will rely on what is available. In most cases, it will be a credit card. Credit card jail is easy to get into and extremely hard to bond out of. Before you know it, you will be paying minimum payments and never impact the principal balance. The vicious cycle will ensue with no end in sight.
So, get that emergency fund started today! Thus, the next time you have and unforeseen incident it will be just an emergency, not a crisis.