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What happens when you aren't paid?

September 30th, 2021 at 04:50 am

When you aren't paid what happens?  Thankfully for our EF nothing.  I logged in and moved the paycheck amount from our sink fund into our checking account to cover our mortgage and bills.  Days like today I am pretty grateful I took the lowest common option and did the refinance from 30 year fixed to 7 year arm.  As ridiculous as it sounds the extra $720/month still went to savings but it just feels like if we had to we could cover the $3100 easier tha $3800.  

But this non-payment is probably standard for a startup.  Yes they have money but it's outsourced and there was a problem proabbly because it was a 3 paycheck month.  I suspect this sort of snafu will happen when you outsource the work.  Just like how we are navigating our new helath insurance which isn't as comprehensive as DH's last job but better in many ways because it's a better network (blue cross blue shield versus aetna).  Aetna was the worse because no one took it.   

Because of this I think that we are definitely looking at spreading out the cost of the new furnace. I think that outlaying $15k in one go doesn't make sense since we may have to cover this type of mistake again.   If people wonder this is what an Emergency Fund is for.  To not stress out about covering your expenses.  I do think Dave Ramsey is correct in being gazelle intense about debt.  But I disagree about $1000 baby EF.  That wouldn't cover half of our mortgage payment. If it were me I'd probably have an EF of at least half a month of expenses plus my mortgage payment.  Otherwise I don't know what I would do if we had only $1000 cash.

4 Responses to “What happens when you aren't paid?”

  1. Turtle Lover Says:

    I agree with you about the EF !

  2. Lots of ideas Says:

    I think the emergency fund amount depends a lot on your situation.

    If you are thousands of dollars in credit card debt, and what you are paying each month doesn’t make a dent in the debt, having a lot of money in the bank rather than paying down debt that costs 18-21 % doesn’t make sense. In fact, I think most people with that kind of debt are not home owners. The ‘baby efund’ ‘ is a small protection from a minor emergency sending you back to credit cards.

    Gazelle intense to get out of that kind of debt is both financial and a lesson in discipline.

    As you get to ‘no debt’ then a six month emergency fun before you start spending on ‘wants’ makes sense, with a few small rewards for motivation is safer.

  3. LuckyRobin Says:

    Even DR agrees that $1000 isn't enough anymore. He has been saying on his show lately $2000 for a baby EF and that's probably related to both the runaway inflation and the pandemic. I personally feel that it should be one month's expenses for people trying to get out of debt and then slam it to 3 months when you get out of debt and then keep contributing until you get it to 6 months while slamming retirement. I never liked the $1k.

  4. LivingAlmostLarge Says:

    lots of ideas I can see the 18-21% but if something happens even rent is more than $1k.

    Luckyrobin, $2000 can barely be 1 month of rent depending on where you live. And I agree that 1 month of expenses doesn't seem like it's not gazelle. If you lose your job how will you pay rent when it's exorbitant to get cash advances on CC?

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