I waited on the hold list at the library for about a month to get “America’s Cheapest Family Gets Your Right On the Money” by Steve and Annette Economides (I think that’s really their last name – they were destined to be frugal!). I’ve read most of it, and I’m happy to report that we already do most of the stuff that they recommend doing to keep your financial life humming right along.
The thing that most impressed me about their strategy – which we aren’t even close to – is how huge their emergency fund is. They don’t just have an emergency fund, they have it divided into 5 pools of money. They have backup money for emergency travel, home repair, unemployment (and yes, they have 6 months worth of living expenses in this one), car replacement and medical expenses. Wow. We have an ING account that we put $100/month into, and we’ve just set up an HSA where we’re also putting $100/month. So we’re working on our medical expenses fund and a general emergency fund. We’re also putting $100/month additional premium towards our HELOC, which is helping to pay it down, and also is available as a worst-case-scenario emergency fund. I have to say, the Economides family has got some serious budgeting and planning-ahead skills. There’s pretty much nothing that could happen to them financially that they wouldn’t be prepared for. There’s no reason for them to ever have to go into debt.
I didn’t learn a lot in the way of new ideas for a frugal lifestyle from their book, since we already do pretty much everything they do (and I think most PF bloggers would feel the same way). But it’s a good reminder that planning ahead for all kinds of financial crises is a good strategy for sleeping soundly at night.