Financial Peace and The Definition of “Emergency”
At work, we’re starting to register people for our Fall 2017 session of Financial Peace University. It’s a BIG part of our mission at Texoma Community Credit Union, and I’d like to take a minute to tell you about my experience and why I STRONGLY ENCOURAGE you and your significant other to take the class if you can. (It’s also free to anyone in the community, with free childcare and dinner included, and there’s more info here.)
I took the Fall 2016 class, and it’s hard to believe it’s almost been a year. Almost a year since we started to actively fight and claw our way out of credit card debt, instead of just paying the minimums and delaying the inevitable. Almost a year since we’ve had to totally reshape our thinking and our habits for the sake of a future that seems that more real when you add a kid to the mix.
The hardest lesson I learned (and am STILL, I REPEAT, STILL LEARNING) is that credit cards are not for emergencies.
This is a fool’s game.
When I first started the classes, and they told us the first step was to save a $1,000 emergency fund, I did not take kindly to this advice. Why would I keep $1,000 of “extra” cash I don’t really have, sitting in the bank when I could be using it to pay off credit cards that are accruing interest every day?
Short Answer: Because it breaks the cycle.
It breaks the cycle of relying on credit cards for your safety net, and a loose definition of the word “emergency” because the spending feels so much less tangible. After about five months of saving up the $1,000, having a real spending emergency, then saving again, and another emergency hitting again, I began to see the light. We saved $1,000 and then soon after Teddy needed tubes in his ears. We saved another $1,000 and then my car needed repairs.
Slowly I came to the realization that we – my husband and I – can be our own safety net. We didn’t need the cards. WE DIDN’T NEED TO PAY 18% INTEREST because we could outsmart the system.
It was an amazing feeling.
Now I’m still a human being, so of course I repeat old mistakes. When I was 22, an “emergency” was cute shoes on sale and Happy Hour sushi with friends before pay day. (A pay day from my first job that still didn’t cover the debt I had incurred + my bills.) I’ve become much more practical since then. But then things like Amazon Prime Day hit, and that Roomba you’ve had your eye on for over two years is $125 less than normal, and out comes that “emergency” credit card again. (You know, just for example. For a friend. Lol.)
And I see myself defending my old habits. “I’ve wanted it forever, and it was such a great deal!” goes the battle cry of the over-spenders.
But there’s a way out. I write this to say THERE IS A WAY OUT. (Even if I am still in the process of finding it.)
And I finally feel like I have the tools to do that. And it’s all thanks to taking that class.
So I realize this was kind of a big commercial, but I really want you guys to know how much this changed my life, and give you that same opportunity.