Emergency Fund 2.0: Surviving Back-to-Back Financial Shocks | Family Finance | 119

0:00 All right, so you've got one emergency. All right, got it covered. 2:00 that becomes stressful 5 back-to-back and suddenly your nervous system is like, I'm out of here. I'm not doing this. So maybe it is a car repair, a medical bill, or maybe you've had to miss work. One of your appliances decides, OK, I'm done or you have what happens to us often your kiddo gets sick and you just have to say, you know what, being a parent raising kids in today's world is a different emotional weight. But also if you have ADHD, then you're also not only do all of those things cause some additional stress, not just the financial part, but the emotional side too.

0:41 Because if we're managing ADHD symptoms and also family life and work and all the things, carrying families financial responsibilities on top of that can be very taxing. So today we're going to be talking about what happens if life likes you real hard and you have to dip into your emergency fund numerous times throughout the month. How do you rebuild after those hits keep coming? How do you recover without feeling shame? And why the perfect emergency fund advice might not work for you and your family.

1:12 All right, welcome to today's episode, Debt Rebel. I am so glad that you're here. And I want to say a special hello and welcome to Carrie and Amanda. Thank you for joining the Debt Rebel community and jumping on my website and filling out some info so that you can get some exclusive content. So, so glad that you're a part of our community. So today we are talking about when emergencies come up and it can feel super defeating, right Then it's not just one thing. And they just keep coming. So what's the point in saving if this if it just keeps disappearing, right?

1:46 So this is sometimes things that we can hear when we're talking about finances and setting up emergency funds because when our emergency funds are getting drained that we can feel emotionally exhausted because we struggle with discouragement, all or nothing thinking or maybe we just avoid our finances after setbacks. And you know what, those things are all normal things, and especially with an ADHD brain, because our brains want to protect us and from from anything that it perceives as a threat.

2:15 So but I want you to hear me say using your emergency fund is absolutely not failure. And you know what? That's literally its job. That's its whole purpose for being. So you didn't fail because your emergency fund got used. You succeeded because debt wasn't your only option. And that's what this show is all about is not creating additional debt for you and getting out of debt because I have seen for myself and my family, but also for my clients, the level of relief and joy when you have less debt or no debt, how much it contributes to your life positively.

2:51 Financial resilience is not about never getting hit. It's being able to recover faster when it does because we know life is going to happen. We are raising kids. Kids can be expensive sometimes, but things can come up that we just cannot predict. We know emergencies are going to happen. We don't necessarily know when they're going to happen. So first thing I want to talk about is this whole perfect emergency fund thing. Perfection is for me, it is I, I would say I used to be a perfectionist and since I got diagnosed, it all makes sense now why I had this all or nothing feeling or thinking that it had to be perfect or what was the point of doing it at all.

3:28 And since I've had some training and some knowledge around that, it's given me an opportunity to say, you know what? There is no such thing as perfection. It is such a, it is such a fib. It's such a lot. It is not. It's not our thing. That's what I think. I'd love to hear what you think. But a lot of Internet advice or, you know, financial gurus will say like we need to have three to six months savings. And yes, that is absolutely a goal. But you have to start somewhere, right? Because when we don't start somewhere, we're never going to be able to get ahead because we're constantly, it's like swimming in quicksand.

4:03 The families that I work with are often rebuilding. Maybe we're trying to survive inflation. Right now, as I'm recording this episode, I am going to have to go fill. I filled up my husband's truck and I'm about to fill up my car and it's almost $6 a gallon for gas. We're managing child care costs. We're navigating maybe inconsistent income or you're healing from past financial mistakes and getting control of those so that you can move forward. So I want you to hear me say that a partially funded emergency fund is still protection.

4:34 Whether you have $300 saved, maybe that's to cover a deductible for something. Maybe you have $1000 saved so that you don't have to put something on a credit card when life happens, those small cushions still reduce the panic and give you the ease that your brain needs. So progress does not mean that it is meaningless if it wasn't perfect. All right, so, So what are some practical ways that you can rebuild after some of these financial hits, right? So something that, like I said before, start small, smaller than your brain wants to.

5:06 Maybe it's tiny automatic transfers to that savings account for your that emergency fund and it's focusing on momentum, not intensity. But one thing that has helped for us is to keep certain emergency categories separated. And so for instance, like cars, that is something that we've we've talked about this a lot in the membership lightly to car expenses are a thing that come up. You cannot predict them. You can still, you know, do your regular maintenance and a lot of stuff, but things just happen.

5:38 Cars breakdown whether they are newer or they're super old in between cars breakdown, so having some additional funds set aside for those car repairs is important. Medical expenses. Also having kids, sometimes you know what you have to go to the emergency room and there's and there might be a co-pay involved with that. Maybe you've got pets and there's some additional expenses there, or maybe you've got some irregular bills and we'll talk about that in a future episode. But some of these things you might have to separate out from your regular emergency fund.

6:09 If you're in your debt elimination journey and you're trying to pay off debt, but your job, you need a car to you need a car for your to get to and from work, or maybe your car is your work, then that you want to to make sure you have an emergency fund set up for those car repairs. Now, if you're like myself and I'm remote, I got to make sure that my Internet is always paid. So I might not have as big of a car car repair fund as someone that uses our for transportation to and from work. All right, so let's talk about how we can reduce decision fatigue.

6:42 So some of these things are to automate our savings, simplify our budget categories and creating these once a week money check insurance with ourselves, build these recovery systems. So what? So some questions that you can ask yourself when you're rebuilding your emergency fund is what has helped us survive this season, What has made things harder and what can we simplify moving forward? So sometimes that is looking at your your expenses and seeing, OK, you know what, there's things in here that weren't helping us rebuild our emergency fund right now.

7:14 We can hold off on them. Or maybe there are things that are like, you know what, this was the thing that helped us get through this season, then we absolutely needed it. Hold on to that. Because when we look through those and we go through that weekly money checking, we can stay on top of things and so that we can rebuild those emergency funds faster than if we were doing, you know, maybe once a month check insurance. But what I want you to hear me say too is you don't need to rebuild everything immediately, OK?

7:42 So sometimes, you know what it's going to happen that, you know, you pull out of your emergency fund and maybe you're down $500. It doesn't mean that it's a failure. It is absolutely what it's there for. So that you can, that's when you will pause your debt snowball and go back to refilling that up until it's to that level, whether it's $1000 for what you've already established is best for you and your family because personal finance is just that it's personal. So sometimes $1000, that's the that's kind of the general rule.

8:11 But depending on your situation, good. You can evaluate that. If you want to pick my brain and ask me that question personally, I have some sessions available. They are free sessions. They're quick 15 minute ones called Borrow my brain Sessions. And I'm going to put that info in the show notes so that you can ask me and we will brainstorm what works best for you and your family as far as that emergency fund goes. But I want you to hear me say you don't have to build everything immediately. So even though you took that money out, we're going to replenish it and we're going to go back to survival mode and seeing where things are and what you can free up, what needs to stay in your budget so that you can rebuild that.

8:51 Because those recovery systems matter more than motivation. And creating that consistency will beat this financial perfection every single time. So when we have financial stress, it can look different than a neurotypical person. So financial stress can impact us neurodivergent people in a more intense way. So our nervous system can get out of regulation, it can challenge our relationships, maybe our parenting, our decision making, because that stress is is creating those that environment for ourselves.

9:24 And so that's sometimes where is shame and can enter that picture where it can cause us to hide or maybe avoid the situation or we go to the opposite and we go into these impulse controlling coping behaviors. So that is just information, right? So seeing how we might have handled emotional stress in the past and reminding ourselves that we don't have to do that that same way again, that we get to keep rebuilding and we can keep planning and we can stop talking to ourselves like we're the problem is that the situation we can respond instead of react.

9:58 And you are not, we're not behind because life happened to you. You just pause and then you it is adjusting the plan a little bit differently. So stable finances are not built by perfect people. They're built by people who are willing to keep adjusting, learning, rebuilding and growing. So that's who I love to work with. If that's something that you're like, hey, I, I probably should either up my emergency fund or maybe I need to talk to someone about what my emergency fund looks like. And if I have enough, maybe I have too much and it's getting in the way of my getting rid of my debt.

10:32 Let's talk about it. You can book one of those borrow my brain sessions. We'll go over that kind of stuff. And remember that emergency funds are meant to be used. Those are your safety Nets because we don't want to put life little setbacks on credit cards. We want to create these ADHD friendly money management systems that require realistic symptom realistic systems and that financial recovery is not a linear process. The challenge I have for you today is to rebuild one tiny layer of safety this week.

11:03 Whether you add $10 to your emergency fund, maybe you review your reoccurring expenses and see does something need to go so that you can move that money to your savings account. Maybe you need to create one sinking fund for those car repairs or if you haven't scheduled your weekly money, check in with yourself. Get that on your calendar. If you are stuck on something or you want to brainstorm what your emergency fund should look like for you and your family, jump on my website. You can get the info on the show notes for the book my brain session Debt rebelpodcast.com.

11:35 All right, I will see you in the next episode. Thanks for joining me. Thank you for tuning into the Debt Rebel show today. Ready to take your family budgeting to the next level? Stop that paycheck to paycheck grind and start living debt free. Head over to my website, debtrebelpodcast.com that's DEBTREDEL podcast.com to grab resources, tools and tips to make it happen. And don't forget, subscribe, leave a review. And if you know another family that will love hearing today's episode, it would be such a gift for both of us, your friend and me.

12:14 If you share this episode. And remember your debt free life starts with one brave step and I'm cheering you on every step of the way. We'll talk soon. Debt Rebel.