Watch Out For That Tree!

Recently, I took a week off for a stay-at-home vacation. The Friday before the beginning of my vacation, I was in a big hurry to get to work. As I eased my car down my driveway, my mind was focused more on work than on the tree at the bottom of my driveway. The loud bang when my car hit the tree certainly redirected my attention.

I exited the car and was stunned at the damage caused by a small tree. Back in the old days, if your car hit a tree, you might knock off the dust on your car. You certainly would not cause major damage.

I was even more shocked when I learned how much the repair will cost. In a flash, I realized how important it is to have an emergency fund.

We have all read that you should have enough money to cover six months of expenses. Saving such a large sum can be a daunting task. You can understand why some people never bother, choosing instead to rely on retirement funds or credit cards for emergency expenses. It costs more in lost savings in a retirement account for an early withdrawal or exorbitant interest rates and fees from charges to your credit card, depending upon your emergency source.

I started small as I began building my emergency fund. As do most brokers and banks, Charles Schwab, Fidelity, and T.D. Ameritrade offer automatic debit programs. I have a fixed sum withdrawn from my checking account every pay period. I found that I would never “pay myself first” if I had to manually sweep the funds.

You can start an emergency fund too. Just call your Parsec investment advisor and ask about setting up an automatic debit program. The service is free and requires minimal paperwork. Even if you set aside just $10 per week, at year’s end you will have $520 that would have otherwise disappeared in your budget. It is a start!

Now, if you will excuse me, I need to surf eBay’s site. Perhaps a vintage Caddy could survive an attack from a malevolent maple.

Cristy Freeman, AAMS®
Senior Operations Associate

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