Saturday, December 12, 2009

What to do when disaster strikes?


Does it seem when you are trying your best to be financially responsible that unexpected budget busters start coming your way? It sure does here. The best way to prepare for a disaster or two is to have an emergency fund. If you are working as hard as you can to be debt free, you should have a $1,000 emergency fund. If you are currently debt free your emergency fund should total 6 months of expenses.

I feel so blessed to have an emergency fund, but even when an emergency strikes, I don't like to spend more of it than I have to. Here are some steps of thinking that help me to preserve as much of my emergency fund as I can:

1. How long before the repair must be made or the bill paid? (Write a specific date down.) The longer you can wait, the better your chance of finding a good deal.

2. Does insurance or warranty protection apply? (You would be shocked how many people throw an object a way or buy a new one when the broken one is still covered by warranty.)

3. How much would it cost to completely hire the repair done or to purchase a replacement item brand new?

4. Is it possible to repair the item yourself? Even if you don't currently have the knowledge can you get the information you need online or at the library? ( is a valuable resource for how to videos.)

5. If you were to repair the item yourself would the cost of the supplies and tools needed (not already on hand) be more than the cost of hiring the repair done? If you did buy the tools, would they be useful to you in other applications? If so, how often would you use them? If not, could you resell the tools on ebay or craigslist and recoup some of your costs?

6. Can you trade labor with a friend who already has the tools and knowledge to make the repair and could use your services?

7. Can you buy a remnant (ie carpet or vinyl flooring) for a repair in a small room or closet?

8. Can you buy the item you need second hand? Craigslist or ebay? Can you buy it from a large volume discount merchant such as, or at a local garage sale or thrift store?

9. Can you use an alternative material or object?

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