Updated: Mar 5
This week’s topic is about managing your rainy day fund especially during the supply chain problem.
The rainy day fund is money that is set aside in the budget to account for small, unforeseen expenses.
The amount that you need to put aside is arbitrary. It is based on what you own with items such as a home or a car and even a hobby.
The best way to determine this, is to look at the age or condition of the items that you own and estimate the cash that you may need.
For example, for a refrigerator or a television that is five years old, the odds have increased significantly that a repair is on the horizon. In my case, I keep $4,000 in a side account.
With that being said, some years are worse than others and with the supply chain issue in full swing, repairs are likely to cost more for products, parts and labor.
As for me, this has been a terrible year; this is just sample size of what I’ve had to repair or replace:
-Garage door motor $800
-Podcast mixing board $600
-Inside storm window treatments $700
-Boiler repair: $200
-Radiator repair: $400
-Refrigerator repair: $250
-Tree limb repair $280
So this totals $3,290 and this just in the last five months.
So here are a couple of key points.
1. If you have something that is functional and you can wait on a repair or replacement, this may reduce the long-term cost especially during a labor and parts shortage.
2. Once you’ve met the funding goal, you can now spend this money in any way that you choose: just keep in mind that when you tap into it, that money needs to be replaced.