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Tess Vigeland: So how’d you do with that whole holiday budgeting thing? Stick to it? Did you even make one? Well, all that generosity tends to come into stark relief as bills start to arrive in January. We wandered the streets of Shreveport, Phoenix and Chicago to find out how folks are coping with the financial holiday hangover.
Rene Castaneda: I work in a warehouse and it’ll be hard, because where I worked, I had all that overtime and that extra money. Now that there’s no more overtime, now it’s back to not buying this and not buying that, basically. Go the cheaper route.
Stacy Kammer: Several years ago, we started saying, “OK, there’s no sense really in putting a lot on credit cards for Christmas. We kinda budget through the year for that. I told my kids, “Jesus got three gifts. That’s what we’re gettin’.” And they kinda looked at me like “What?”
Patrick Mosley: I think as always, people spend what they don’t have and spend the next year trying to recoup it so they can do it all over again.
Sam Lindberg: I will cut back a little bit just to back to my normal levels. At my work, we have a bonus in April so money will be raining then.
Oh so April showers include money from the sky, huh? Lucky man! Well, somewhere in there you heard promises of better behavior in this new year. And a lot of you did financial resolutions, right? If one of them was to start an emergency fund, good for you. But be careful what happens to it.
Lois Griffin: Peter, that was our emergency money! And your daughter just so happens to need a new pair of glasses.
Peter Griffin: Lois, no one really needs glasses.
Meg Griffin: You wear glasses.
Peter: That’s only to fool The Man from the draft board.
Lois: I can’t believe you squandered that money! I swear, sometimes I feel like I’m married to a child!
Um… she IS.
Anyway, if you’re finding it hard to even conceive of having an emergency fund, here’s a tip: Rename it! Rename it something unprintable! Something that would get me in trouble with the FCC! Meg Favreau of Wisebread.com joins us again to help out with that one.
Meg Favreau: Thanks for having me.
Vigeland: So we’re gonna talk today about the famous, infamous emergency fund. Only, we’re gonna have a slight twist on this. The emergency fund is something that we basically preach about week-in and week-out on the program. And frankly, people are probably tired of hearing it.
Favreau: Yeah. I think so too.
Vigeland: Aren’t we all? SAVE SAVE SAVE! DON’T EVER SPEND ANY MONEY! Right?
Favreau: I like thinking about the emergency fund slightly differently. Because, here’s the thing: The emergency fund obviously isn’t fun.
Vigeland: No, it’s boring.
Favreau: It’s SO boring.
Vigeland: It’s like, “What if nothing ever happens? My money’s just sitting there.”
Favreau: And plus, you don’t want to think about something bad happening.
Vigeland: Well that’s for sure.
Favreau: You know, I think that’s one of the hardest things to wrap your head around and really commit to is to get yourself to save money for something awful happening.
Vigeland: Right, which is why a lot of us don’t do it.
Vigeland: So what would help us do it?
Favreau: I like to think of the emergency fund as, what I will call for the moment, the “Screw You Fund.”
Vigeland: Oh! Why don’t we take a page from Cee-lo, we’ll call it the “Forget You Fund.”
Favreau: I think that’s perfect. The idea with the Forget You Fund is that it’s money that is maybe the exact same amount of money you’d put aside for an emergency fund, that could maybe be used in an emergency. But it’s also primarily money that you have so you can give the middle finger to a situation that you rae in that you don’t like.
Favreau: Can I say, “Give the middle finger”?
Favreau: So the idea is that you have this money set aside where if you are in a bad situation with a job, if you’re in a bad situation with a relationship, if you’re in a bad living situation — You can just say, “Forget you!” and you have the money to go off and live your life how you want to.
Vigeland: Have you ever had one of these yourself?
Favreau: Here’s the thing: I didn’t for many years. And I was in situations where I really really could’ve used one. For example, I had a job that made me cry regularly.
Vigeland: That’s not good.
Favreau: No, it’s not good. And I didn’t have savings at that point.
Vigeland: So you’re stuck!
Favreau: I was stuck. Where if I had a Forget You Fund, I could’ve just gone out of there immediately instead of doing what I did what I did, which was quitting with no other work lined up.
Vigeland: D’oh! Nope, nope. Not the best thing to do.
Vigeland: Then let’s get down to brass tacks. And how big should your Forget You Fund be?
Favreau: Realistically, $1,000. If you have at least $1,000, that can cover a lot of things. That can cover getting your car repaired or rent for a month or living expenses for a couple of weeks until you get that next job.
Vigeland: Right. So $1,000, that is totally do-able.
Favreau: Definitely. Emergency funds are so intimidating and I feel like when you’re first starting out in the work force, it’s hard to save a lot of money. So yeah, $1,000 — totally do-able. Once you get that, look towards $2,000.
Vigeland: OK, so you can start small, build from there. But the key here is to really change your mind set. It can’t just be a boring emergency fund. In fact, you know what, maybe we won’t even use that term on the show here anymore. I wonder if we can get to that point. We’re going to start calling it the Forget You Fund.
Favreau: I like that. I highly support it.
Vigeland: All right, thanks for coming in. We’ll look forward to folks starting up their Forget You Funds. I love this.
Favreau: Great, thanks for having me back Tess. And you know, I was going to close this by saying “forget you,” but that’s really rude.
Vigeland: No, let’s not do that.
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