Too many things break at once, too many expected expenses piled on top of unexpected ones
Since December last year:
- New water heater - about 55% of my salary
- New vacuum cleaner - about 45% of my salary
- Orthopedic doctor's appointments + left knee MRI + injection for knee + physical therapy for meniscus fracture + spur (dunno if it's the correct term in English) on right foot + physical therapy for it - about 90% of my salary AND COUNTING ...
Only the vacuum cleaner could have been avoided since the old one STILL worked BUT it was "showing it's age" of 22 years.
Good thing i had WELL OVER 1 months salary's worth of "emergency funds", or i'd be screwed: here's hoping no more unexpected expenses pop up in the near future, until i replenish the "emergency funds" some more, which means avoid spending unnecessarily for 3 or 4 months, minimum.
Yeah my ideal situation would be cleared cc's, ~5k in 'emergency savings', double-triple mortgage principals every month (I double when I can), max'd roth ira, and the rest to who-knows-what. Someday.
- I saved up around 6K€ and amortized 5K€: that was around 14 monthly house payments @ the time (Euribor tax rising WAS NOT HELPING one bit), and that brought down the monthly value by 21€
- Did it again 3 more times and it brought down the monthly payment value MORE each time (Euribor tax dropping helped)
- Liquidated the house payments paying just over 7K€ to "finish the job": was paying LESS than 100€ monthly payment + the mandatory insurance just before this
And that's how i paid for my house almost 9 years BEFORE "i was supposed to".
After the 1st amortization, i "didn't feel the difference" in my wallet, but i did after the 2nd, and more so after the 3rd and 4th: saving money each month became EASIER after the 2nd amortization, and MORE SO after the next ones.
People spend too much on things they don't need. A portion of the working class does live on poverty levels especially depending on their location. But generally a lot of people just buy too much and don't budget their money. I am a good example, 30 years ago I was always broke and had about $4000 in credit card debt and other debt on top of that. I got fed up and did the Dave Ramsey thing before I knew what it was. I worked hard, which got me a promotion. I sold some stuff, busted my ass, and paid everything off within 9 months. I started saving, getting 6 months worth of wages for an emergency fund, and then hitting the retirement hard. I also saved up for my next car before I bought it. A year before this if you would have asked if it was possible I would have said I needed a huge raise. Actually I needed to get control of my spending.
I wish people knew how much better it is actually having money in case of an emergency, and actually earning interest rather than paying interest. If my car breaks down or my furnace dies it sux, but it's handled, and then I put that money back. My coworker and I were discussing this at work and he said how much do you have in your checking and I said about $4,500 right now to which he replied man if I had that I'd buy a keg of beer and a 75" tv to which I replied that's why you'll never have that.
Yup.