There are happy surprises in life. Just when I spent the last of the 3-month expense fund paying for our mortgage, we got a windfall. Now I’m wondering if I should rebuild that cushion, or redirect the money.
I set up the 3-month expense fund because Mr. M’s freelance gig means an unsteady paycheck. The fund was to help carry us through the lean months while still meeting our goals. I base our budget on what he typically brings in, but it’s a feast or famine cycle. The $3000 I set aside was enough to keep our budget going for three months with only a (tiny) unemployment check coming in on his side. At least he gets unemployment.
Hollywood is a strange place to work, in more ways than one! The studio days are long gone, when the stylists and costumers and set decorators all worked a typical 9-5 job on the back lot. Job security is non-existent now, you must always hustle for the next project. The hours are brutal, he once pulled 36 hours straight on a commercial. But you take it because there is no guarantee of when, if ever, you will work again. Sometimes he is paid as a regular wage earner, other times as an independent contractor. Only the W-2 work counts towards unemployment, so he doesn’t receive much. For the past year the amount actually dropped to $160 a week. In LA, that doesn’t go very far. But I guess he had one good quarter last year.
We were shocked to automatically receive a notice of new award as his claim came to an end. An efficient government -I must be dreaming. Even better, the new weekly benefit is $429! I hadn’t kept track of last year’s earnings, by earning over $10,000 in one quarter he had a huge jump in benefits. Suddenly we can have a budget without the need for the 3-month fund. Work seems to be picking up, maybe I can safely put that money to use instead. The house needs repairs, Mr. M needs a retirement fund. There is always the wedding to pay for. It seems silly to keep a few thousand dollars idle. Should I rebuild the fund, extra savings never hurt, or put that money to use?
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8 comments:
Since your 3-month expense fund appears to be the step-sister to the emergency fund, my vote is to keep it in the bank, just in case. Can you put it into a Roth IRA for Mr. M? That way, the contributions can be withdrawn without penalty or tax in a pinch.
Save it! You said yourself, LA is an expensive place to live and your income can be irregular... Better to be prepared for the worst and get the best than to be prepared for the best and get the worst.
I would definitely save it and rebuild your fund.
Honestly, Mr. M's job sounds so much like mine which is why I relate so closely to your posts :)
It's also why I keep a good amount of savings just in case I don't work for a year or more
The most impressionable sentence in your post today, was that "job security is nonexistent"
That is So true!
John DeFlumeri Jr.
Rebuild the cushion to the 3-month level. Then use your extra $$ toward other expenses, if necessary. I recommend beefing it up again, especially in this economy. Good that Mr. M is getting a healthy & extended unemployment check.
I'm chiming in with the others--rebuild the fund! But most imporantly, congrats! You are the first person I've ever known to have a positive experience with a government entity. Wowza!
I would definitely rebuild the fund, congrats on getting the expeditious bump! I'm going to hope your luck rubs off on me. ;)
I have to add my vote. Save the money and rebuild your 3-months expense fund! - Glad to see that the government is working for you (which it should do anyway). I have also had good experiences dealing with the government including the IRS.
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