Monday, March 14, 2011

New Parents Learn Need for an Emergency Fund

My oldest daughter and her BF have been struggling for a few months. She's had to take mat leave from work, their baby was born, he was injured at work, and then lost said job shortly after. They have had to apply for assistance from agencies, and are now getting help from Ontario Works. Every dime they get, they put toward rent and the repayment of the loan. They struggle, but are learning during the process.

Daughter filed her income tax on Saturday, and opted for the Cashback thing that all tax places do. Within the hour, she had a cheque in her hand for almost $800, and because of something from previous years taxes, she will also be getting a cheque from Revenue Canada for another $250. She had dreams of setting aside money for next month's rent. BF asked her about getting the XBOX back from us. Fate had other plans.

While walking to the bank Sunday (Really? TD opens on Sundays now??), they were talking about how to allocate this money and where when the wheel on the stroller broke off. Some unrepeatable words were said, and the wheel put back on temporarily, they knew that very suddenly they needed a new infant stroller. Banking done, they headed to Zellers, with the stroller wheel falling off repeatedly. Thank goodness, the Zellers was only across the street. New 2011 model stroller, with infant carseat, all up to standard = $300 and change.

She calls me to tell me about their day and how coincidental it was that they just happened to have the funds available to buy said new stroller. I reply, "And it's things like that happening that show you WHY you need to have an Emergency Fund. I think having your stroller fall apart in the middle of the street qualifies as an Emergency."

I tell her to imagine if they didn't have a tax refund cheque that they were depositing in the bank that day. What would they have done then? I reminded her about putting away 10% of all the money they have coming in. Sure, it makes their already impossibly tight budget even tighter, but then when things happen that they haven't even imagined, they will have some money set aside to help relieve the stress of the situation.

I say to her that the powers that be are showing her again that BF's priorities must change. With the money she had wanted to put toward rent, he wanted to get the XBOX. I asked her to imagine that they used the money to get the XBOX back from us, then the stroller breaks down. What would have happened then? Would either of them  have called us and asked to return the XBOX (again) so they could have the money back for the stroller? Yes, they would have. And we would have said no.

I asked her, how in the world are you going to push your kid around town in an XBOX?  She laughed, but it brought home the point.

I reminded her that the mentality of "We have money, let's spend it!" is part of how they got into this situation in the first place. They need to stick with paying the bills, putting some money away for things that could happen, and treating themselves is way, way down on the list of priorities. A $10 treat is acceptable. A $400 treat is not.

On a good note, all this strife is pushing them to get their educations. BF will be returning to school for his OSSD very shortly, and DD1 will be doing correspondence for her OSSD. I'm proud of them for taking those necessary steps now to improve life for themselves and their son.


  1. Wow what a great approach you have with your daughter. Gentle guidance from a couple of steps back.
    I'm sure there are some days when you would like to bang your head on the wall when you hang up.
    It's hard when someone you love doesn't take a good path, be it in relationships, education or finances. (Funny how the 3 go together)
    Good for them for going back to school.

    I really enjoy your blog!

  2. Perfect timing and hopefully a lesson learned. Sounds like your daughter listens to you, but she's got her hands full. Getting their Gr.12 will certainly help them in the job dep't. I love how you take advantage of every "teachable moment!"