Right as we begin this journey we hit the first bump in the road. Our furnace stopped working right before the first cold wave of the winter hit. Upon inspection, the HVAC technician said “Didn’t your home inspector say anything about this?”. Things are not looking promising.
Our home inspector did mention that it seemed odd. It turns out that the furnace was oversized, in too small a space, and installed in a way that servicing it was impossible. Long story short, we ended up paying for the installation of a new heater. A $4000 set back right from the beginning. Ouch!
The lesson is that setbacks and surprises can come at any time and one should be prepared to handle them. Luckily we had the extra money accessible. But it made us think about have some sort of emergency fund.
Our take on the concept is that instead of having some amount of money sitting in a low interest earning account, we go about our usual business of investing; being sure to have enough liquidity to access emergency money if we need to. Additionally, under most circumstances we will pay emergency expenses via credit card, giving us time before the bills are due. Our monthly savings money can be diverted as necessary. Others espouse the idea of opening a HELOC to have money available when needed.
So because of this we are abandoning the notion of an emergency fund in the traditional sense. Time will tell how this strategy works out. For now, we may have hit a small bump in the road but at least we’re staying warm. The FIRE burns on!