Stimulus payment didn't go towards debt

Sooo we knew we were receiving $5,600.00 in stimulus money. We were so excited! 

We were going to keep $600 to spend on ourselves for once, and put the rest toward our debt. We would finally make progress after being at a stand still for the past two months!

Then the dreaded snow-mageddon happend. Here in the south we were not prepared for it. We were blessed enough were i was able to work from home and my husband had enough PTO to cover the full week that both our jobs shut down since everyone was iced in. 

 

The small structure we had to cover our lawn mower, four-wheeler, and other home items came down and tore apart. Insurance will not cover it. 

 

We had a choice. Pay off debt and make a dent and save up to buy a structure eventually while our items where left in the elements deteriorating over time, or buy a new carport structure. 

 

We choose the carport. Then we had another decision... what we needed was an in closed unit, but what we wanted would cost close to $12,000.00. We considered...we came close to taking on that extra $300 a month note and using the stimulus as a down payment. Then we came to our senses. 

 

We did NOT need another note. We chose to go with a carport structure that would just provide a shelter over our items, costing us a whooping $5,000.00.  It feels good not taking on another note, but depressing not to take out those 2 and a half credit cards. 

Once again I have to remind myself, we're not going backwards! We're looking forwards! We're not going into more debt and we're working our way out of the living paycheck to paycheck life. 

One thing being iced in for a week did teach me is that our $1,000.00 emergency fund isn't enough. We need a bigger fund to cover if one of us is forced off a week without pay. So now we're working to build it up to $2,000.00 then back to tackling the debt. 

 

We haven't cut out dinning out, or family fun time, those cost us about $300 a month total. We feel if we cut off everything, we'll revert back to our old ways of going into debt. It's a slow path, but we're making it. 

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  • Awesome!  That was a hard choice, but it sounds like you made the best choice you could given the options.  Yes, it is really a pain that it couldn't go to debt, but you didn't increase your debt either!  And that's significant.  Uncle Sam came through and helped you roll with the punches.  I think you're doing great, and it was a good choice to use the stimulus for that, and not to get the better (more expensive) option.

    I agree with the $1000.00 EF not being enough.  I think you're wise to try to increase that, even as you're still paying off debt.  Once the debt is gone, EF can be increased even more.  

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      • Jessie Madden
      • Over Spending is my middle name
      • Jessie_Madden45
      • 6 mths ago
      • Reported - view

      Bruce Thank you for your encouragement! 

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  • Jessie Madden said:
    The small structure we had to cover our lawn mower, four-wheeler, and other home items came down and tore apart. Insurance will not cover it. 

     You made the right choice and you acted with incredible discipline! I'm not a homeowner yet, but I am a renter with insurance. I've never read the fineprint of my policy. Did insurance fail to cover it since it was a non-permanent structure, outside, or for some other reason?

    I'm just curious because I'm always fearing in the back of my mind that all the insurance i pay for (umbrella, car, etc.)  wouldn't really be useful in a number of situations.  For instance, my friend's mom got her car hit a couple weeks back. It was parked on the street outside her house, as it has been for years. The driver responsible can't be located. Car insurance says it would be home owner's (I guess she doesn't have comprehensive?) and home insurance says they won't cover the car. How disappointing insurance can be :(

    But back to your situation, I'm trying to pay down debt too and I think you made an excellent choice not falling back to old habits of CCs or loans. Way to go! 

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      • Jessie Madden
      • Over Spending is my middle name
      • Jessie_Madden45
      • 6 mths ago
      • 1
      • Reported - view

      Pineapple Gal it wasn't a permanent structure. We knew we'd have to replace it one day, but since we had something over the items it wasn't a priority at the time.    Thank you for your encouraging words!

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  • Good for you! That’s a really tough choice, but avoiding taking on additional debt is a great way to help you on your road to paying off debt. Building up an emergency fund is definitely key for these kinds of circumstances. Most experts recommend saving three to six months’ worth of expenses for emergencies, this way if someone loses a job or you face another unexpected repair, you don’t necessarily need to take on debt to deal with it.

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    • ryan_themoneyguy And in YNAB, most people suggest splitting those emergencies out into separate categories - Loss of Income, car repair, home maintenance, medical, vet, etc. 😉

      Sure it takes a while to save up everything, but that's why you can WAM from car repair to home maintenance if your washer goes out before your tires.

      But, since this thread was resurrected, OP, good work! 🙂

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