Emergency Fund Help???

Submitted by ferriswheel09 t3_11drtw1 in personalfinance

I (26F) live with my mother, brother and another family member. We are experiencing power surge issues which will require an electrician ($2500). I recently reached my first milestone of $1k emergency and I am the only person who can cover most of the payment.

My mother and I are the only salaried workers in the house. I can contribute all or partial of the following:

Emergency fund: $1k (this is 100% of account balance)

Credit card payment: $700 (this is an extra payment to bring down my $16k cc balance)

Joint savings account with mother: $500 (this is 100% of account balance)

What should I do? Should I consider taking out of my 401k?

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Varathien t1_jaai961 wrote

Well, this family situation is unsustainable. You will never dig yourself out of debt if you take it upon yourself to financially support two non-working adults.

21

BouncyEgg t1_jaafdsa wrote

May I ask why the other folks in the household not contributing to the household budget?

Is this home that you live in owned or rented?

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ferriswheel09 OP t1_jaah5zu wrote

My mother pays almost $2.8k for the mortgage and can’t contribute a lot to this unexpected expense. My family member receives retirement funds and pays for some of the utilities every month. My brother works some hours per week and cannot afford to contribute. (sorry for any weird wording here. I am still building my finance vocab)

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OakesZ992 t1_jab1hxb wrote

They were probably more so asking why you are the only person out of three household incomes to have some sort of emergency fund. Is your brother an adult? What does "works some hours" mean?

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Rave-Unicorn-Votive t1_jaafzha wrote

Someone else can put it on their credit card.

And you should not have a joint bank account with your mother.

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ferriswheel09 OP t1_jaahpl9 wrote

I am the only person with a credit card unfortunately! We were hoping to contribute to the joint savings account with the goal of buying rental property one day

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Rave-Unicorn-Votive t1_jaaigh8 wrote

You are in no position to be considering buying a rental property, let alone actually buying one.

Someone else needs to apply for a credit card. Everyone else needs to get a second job.

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Greenappleflavor t1_jaai01j wrote

You and your mom each don’t have enough funds to cover an emergency ($2500 for an electrician for example), you should not be putting money into a savings for rental property. You need to get your own houses in order before doing anything like that.

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TomorrowIllBeYou t1_jaahwga wrote

You shouldn't be saving up for far future investments with $16k in credit card debt. Everything beyond your emergency fund should be going to your debt, not far-off dreams of owning rental property.

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OcelotWolf t1_jaajk4e wrote

The possibility of achieving that goal is so far away it's not even funny. Put that thought on the backburner and focus on righting the sinking ship that is your household situation

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Ickyhouse t1_jaaptfj wrote

I wouldn't consider taking out of 401k.

You need $2500. You have $1k in an emergency fund. This is an emergency and the entire reason you have an E-fund. Use it. Now you need $1500. The extra $700 towards the CC debt now goes there too. Pay only the minimum now. So you are down to needing $800 for this repair. Now is where the other members need to help chip in. This is their home too, they need to contribute something. Being retired is not an excuse. They need to have budgeted for emergencies just like you. You shouldn't have to cover their lack of planning.

That said, if they still don't contribute, you pick up whatever extra work you can. Everyone needs to cut back and work together to get that last $800. As an additional bit of help, many trades don't ask for $100% of the money up front (and shouldn't). So you can probably work it out to pay part now and then the rest once the job finishes. That does buy some time.

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mrdonaldglover t1_jacrsjr wrote

I wonder if OP is currently panicking about the electrical issue. So they’ve only gotten one quote so far.

This issue needs to be fixed ASAP, but this does not mean you don’t get multiple quotes.

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illusoryphoenix t1_jaaied8 wrote

If you can make a smaller CC payment right now, do it. And forget about the savings account for now. Get the much-needed repair done first, THEN worry about getting out of debt, THEN you can focus on saving.

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Character_Double_394 t1_jabna1v wrote

than credit card is probably making you more broke than anything. that is the true issue here...

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