Surprise Expenses

calculation-390319_1280Even though most of my education and training surrounds science and engineering, I’ve always been fascinated by financial planning. I’ve heard and read many different financial planning “experts” and their own versions of how to save money and plan for your future. They all make it sound so easy. However, I’ve found through my own experiences and the experiences of others that it’s far from it.

One of the most difficult parts of the financial plan is saving for emergency expenses. We all know that we’re eventually going to face those surprise and unexpected expenses.

My most recent one was when my vehicle suffered internal damage to the transmission, which required a $3,000 rebuild job. Without some emergency funds stashed away, this would be a huge setback for any middle-class family such as mine. Unfortunately, due to some long-term unemployment a few years ago, my family no longer has such a fund saved away. It’s going to take quite some time to recoup this loss.

I’ve discovered that I’m not the only one that has found it very difficult to save for such expenses. This recent incident has left me with a serious resolve to review my family budget and set things right so that I will be able to set aside funds for such surprises. Apart from the obvious shaving away of some “unnecessary” household expenses, I keep thinking of ways to generate more income through improvements to my job or career. That’s why I’ve always tried to keep going with Continuing Education courses here at Mohawk College.

It’s a shame that many employers are vigorously trying to come up with ways to suppress wages and salaries, knowing that inflation causes things to be more expensive for their employees. I certainly don’t blame anyone for moving around from job to job in search of that happy medium of enjoying your job and earning a decent income.

piggy-bank-478158_1280When I review my own financial situation, I often wonder how others manage. The low interest rate environment that we’ve been experiencing since 2010 has made it far too easy and tempting to borrow funds and pile on credit debt. I sometimes think about what would happen if rates were to suddenly jump up, especially with my mortgage. We really must consider whether we can maintain our debt repayment plans if the rates were to rise sharply (although it appears that this won’t be happening for a little while longer). We must realize that the prime rate isn’t going to stay around 3% forever.

If I ever find that I can’t seem to get my financial house in order, then I’m not ashamed to seek the advice of a professional financial planner. I just know that when the day comes that I can save enough to maintain an emergency fund, I’ll have achieved my own financial peace of mind and enjoy my daily routine much better.

ToddMidgley– Todd Midgley
Electrical Engineering Technician ’91
todd.midgley@mohawkcollege.ca

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