Living in the Financial Emergency Room

Ruby: The Bionic Rescue Dog

It was 2014, and I was teaching a financial readiness class for first-term Airmen at Moody Air Force Base. During one of our breaks, I received the follow-up call from my veterinarian that I had been anxiously awaiting. Our dog, Ruby, a 100 pound Mastiff mix who was like a child to my husband and I at the time, needed a surgical procedure that would cost us several thousand dollars. I had just been talking with the group of Airmen about preparing for financial emergencies and there I was, faced with one of my own.

This wasn’t the first unexpected financial expense that my husband and I encountered during our years living military life together — nor would it be the last.

Like many people, we’ve had unforeseen car repairs, last-minute travel for family emergencies, and the inevitable PCS-related costs that made us feel like we were “hemorrhaging money,” using the words of MFAN Advisory Board Alumna, Rebekah Sanderlin, in an article from 2020 where she cited MFAN’s Military Family Support Programming Survey data. So, when faced with a financial trauma, how do you triage and determine what to do next?

Triaging a Financial Emergency:

When you encounter an unexpected blow to your budget, you may have enough in savings to cover the expense. However, if you sought support for unplanned expenses through an emergency loan or grant via a military aid society (Air Force Aid Society, Army Emergency Relief, Navy-Marine Corps Relief Society, or Coast Guard Mutual Assistance), other non-profit organization (like Operation Homefront), or even a family member, you’re certainly not alone.

In doing so, you navigated one of the most stressful experiences in personal finance. While financial hardships can be traumatic, they can also lead to personal growth and can become a catalyst for change.

As an Accredited Financial Counselor (AFC®), I have found that change begins with the “B” word: budget. I prefer to call it a “spending plan,” and it starts with understanding how you spend your money. Contrary to popular belief, creating a spending plan doesn’t necessarily mean you will have to start pinching pennies. The goal is to illuminate where your money is going month-to-month so that you can ensure you’re triaging priority number one: you!

You may have heard the phrase, “pay yourself first.” It’s one of my favorite personal finance mottos and the foundation behind creating an emergency fund.

An Antidote for a Financial Emergency:

Financial experts recommend setting aside 3-6 months worth of living expenses in an emergency fund to deal with unforeseen financial hardships. Some recommend more — especially after witnessing the financial devastation many people experienced due to the COVID-19 pandemic. But, when you add up your monthly living expenses and multiply by 3 or 6, you may feel overwhelmed by the result.

So, let’s “start small and think big,” like our friends at Military Saves have been known to recommend. Set your sights on a milestone of $1,000. A thousand bucks will get you through many types of unexpected expenses and is a great starting point for what will become your eventual 3-6 month emergency fund.

To determine how to get there, come back to your spending plan. How much can you afford to set aside each month? Even if it seems like a small amount, don’t let that discourage you. The little things always add up to much more than you realize. This goes for spending and for saving. Much like an exercise regimen or diet, small changes in your financial plan are relatively easy to implement and can leave you feeling healthier — both physically and mentally.

One of the best ways to begin saving is to set up an allotment in myPay. This will move a specified amount of money on payday right into your savings account. Or simply set up an automatic transfer from checking to savings each payday. If you automate saving so that you don’t have to think about (or risk forgetting about) it, you’ll thank yourself later!

Mending Your Fiscal Wounds:

Try to avoid telling yourself that you cannot afford to save. Instead, remind yourself you cannot afford not to. If you need additional resources and information, don’t hesitate to contact your installation family center to speak with an Accredited Financial Counselor (AFC®), Chartered Financial Consultant (ChFC®), or Certified Financial Planner (CFP®).

The financial emergency room is the kind of place we will all visit from time to time, but certainly not the kind of place we want to live. Whether it’s your dog’s torn ACL, going from two incomes down to one thanks to a PCS, or an HVAC that quits on the hottest day of summer, a little bit of personal financial planning keeps you ready for whatever life throws your way.