A WORD FROM THE AUTHOR: Hey everyone! I hope youāre having a good weekend. If youāre enjoying this newsletter, why not share it with a friend? My goal is to continue growing Finessing Finance and gain new subscribers when possible! This week, weāre chatting through emergency savings.
Emergency Savings
This article serves a reminder that any day you could pay a medical or automobile bill. This past week, my carās A/C went out. Since starting my personal finance journey, Iāve relied on friends to guide me on how to fix common car problems. My girlfriend demonstrated how to replace a car battery last year and showed me how to replace A/C freon with an Autozone can. Sheās continued to teach me car self-maintanence, saving me hundreds of dollars for common issues.
Back to the problem at hand this week. Summerās here and itās getting a bit hot driving in L.A. with the windows down. I drove to JiffyLube to diagnose my carās issue and they stated the diagnosis is that the A/C compressor itself was not responding. If you know anything about cars, you know the A/C compressor is a solid $1,000 to replace for the part and service.
The following weekend, I decided to have the Nissan dealership inspect my 2011 Rogue. They confirmed that I would need a new part entirely and found out a myriad of issues with my vehicles from brake pads to dirty oil, the total fix-up would cost $5,000 instead. I opted for a $2,000 service to replace the brake pads and fix up smaller issues for a planned roadtrip next month.
Cars Keep Us Poor
Carās are a depreciating asset, and I recommend buying used cars throughout your entire life. Maintance alone can cost more than a car is worth if something goes wrong. Why buy a new car when it costs x% of your yearly salary?
PBSās Two Cents said it best in their video called āHow Cars Keep You POOR!ā on YouTube. Throughout the video, the couple works through the math of car depreciation and youāll quickly realize that every mile that goes by, depreciates your carās value.
Recently, I did an exercise to see the current cost of my car according to Kelly Bluebook. If you donāt know, Kelly Bluebook is the handguide on finding a carās value. The exercise is to cost out how much your car is in your head. After checking through Kelly Bluebook online, were your expections met? Higher? Lower? You can astound yourself at how much your car is worth.
Emergency Savings
The key takeaway of this article is having emergency savings. Regardless of the finance influencers you follow, emergency savings is the first step of your personal finance journey. Initially you should have 6 months of emergency savings to cover unexpected life costs like medical or car maintainence.
You never know when life will hit you.
Have a good week!
Jordan