Do You Have a Rainy Day Cash Fund?

Everyone should have a rainy day cash fund.  Not an emergency fund.  Although, you should have one of those as well.  No, a rainy day cash fund should be exactly that.  Cash.  Easily accessible, and easily spendable. Ahhh!  Did he just say “easily spendable”?  Yes.  I did.  Why would I say something like that?  Common advice is that you should put your money in an account where it isn’t easily spendable.  Especially your emergency fund.  You don’t want any everyday “emergency” to drain your emergency fund dry.  It’s for real emergencies.  An engine in a car that stops working and needs repairs.  Although, some would argue that’s what a car repair fund is for. Those quasi “emergencies” aren’t what a rainy day cash fund is for either.  Sorry.  I’m sure some of you wanted me to tell you that it was smart to have a little stash of cash that you could hide away for those tools you really, really, “needed”.  But, it’s not for that.

What is a Rainy Day Cash Fund for?

Rainy Day Cash FundIt’s still for real emergencies.  Just not the kind that your emergency fund is for. Consider.  A major power outage happens.  You really, really, need a tank of propane to light up to heat your house until the power comes back on.  You get to the gas station, or wherever you buy the propane from, except they don’t have any power either.  Their credit card reader isn’t going to take your debit card.  In fact, they’re writing down transactions and calculating change with a calculator.  Without power, it’s a cash only transaction.  If you don’t have any cash, you’re headed back to your cold house without any propane to heat the house with. Taken to an even farther extreme (a Prepper extreme, you might say) you could find yourself in a situation where regional or national economies fail entirely.  Of course, having cash in that regional or national currency probably isn’t going to do you much good.  That’s why you hear all the stories about preppers stockpiling gold and silver.  They believe that in a situation of economic collapse, everyone will revert back to gold and silver for bartering with each other.  In the show, Revolution, which is about the total loss of the power grid and the destabilization that follows, you’ll often see people paying each other in diamonds. I’m not saying that you’ve got to have a couple of coffee cans full of gold coins out under the tree in the backyard.  For most of the situations you’ll find yourself in, a little of ol’ greenback will do you just fine.

How Much Cash in a Rainy Day Cash Fund?

Thousands.  Then, please send me a note with your address, and the exact location where the cash is stored. I’m only kidding.  Much like anything else, your rainy day cash fund is a bit variable.  It will depend on what you can afford to just put away in cash.  Although, for most, the rainy day cash fund is well within budgetary limits.  Really, what we’re talking about is having enough cash available that you can afford a tank of gas, or a loaf of bread should you be unable to use a debit card. In almost every case, something like $100 should be plenty.

Where to Put the Rainy Day Cash Fund?

The short answer is, wherever you want.  Just make sure that it’s reasonably secure, and easily accessible.  Buried in a can in the back yard is probably not the best idea.  Your wallet isn’t a very good idea either.  If you’re creative enough, you can find plenty of places to hide that small stash in your house.  If you’re not so creative, there are plenty of pre-devised ways to stealthily hide your money.  Here’s a few easy ones:

  • Tape the bills lightly (you don’t want to rip them taking them off) to the back of a framed picture in your house.  Most people won’t look there, and you’ve only got to take the picture off the wall to reach them.  Just don’t forget they’re there if you decide you don’t want the picture anymore.
  • Under your mattress.  Yes, really.  It’s an old joke, but it’s also a convenient place that’s easily reachable and that most people aren’t going to casually look in if they’re being nosy.
  • In a book.  Pick your favorite book, and your favorite page and place the bills in the books there.  Again, easily reachable, and less likely to be found.  Just make sure that if you ever decide that you don’t need that book around, that you take the money out first.
  • In the freezer.  This is another old one.  Throw the bills into an envelope and place it at the back of the freezer.  Easy enough to get to if you really, really need it, but not so easy that guests (welcome or not) will easily find it.
  • Behind the furnace.  Put the bills in an envelope, along with a decently strong kitchen magnet.  Attach the envelope to the back of your furnace or any metal surfaced appliance so long as they won’t be exposed to flame or extreme heat.  Easily accessible, but who’s gonna go poking around your furnace (or the back of your fridge) looking for loot?

That’s just a few ideas.  What it really boils down to is putting a little cash away for a rainy day when you need it, and placing it somewhere where it won’t easily be found by prying eyes. What do you think?  Should you have a little rainy day cash fund?  How much would you put in it?  Where are some other good places to put the cash?

Frugal Estate Planning

One of the joys of getting married and having kids is that you then must face your own demise.  The poet Donald Hall wrote about this in his poem, “My Son, My Executioner” stating, as a man and his wife look down on their newborn son, “We twenty two and twenty five/who seemed to live forever/observe enduring life in you/and start to die together.”

Cheery, thought, eh?

Estate Planning Isn’t for the Faint of Heart

Yet, if you have children, you must plan for their future should you die while they’re still young.  I know, no one wants to do this.  In fact, 4.5 years ago when I was pregnant with my last child, I sat down to do a will and trust kit that I got online.  I only got about three questions in, before, in my wild hormonal state, I broke down crying when I started facing the questions about when I would want the cord pulled.

It took me another four years to feel ready to have our will written.

I know.  Irresponsible.  Yet, it took me that long to accept that yes, I will die at some point, and yes, I need to plan for it now, while I’m still healthy and (relatively) young.

It Takes a Strong Wallet, Too

However, facing my own mortality was only part of the problem.  Once I was ready to have a will written, I had to face the fact that it was unbelievably expensive!

We live in the suburbs of a large city, so I don’t know if that’s the problem, but the first lawyer we contacted quoted us $2,500 to set up our will.  When I told him that we are living on a smallish income and paying down student loan debt, he generously agreed to put us on a payment plan without charging interest.  While I appreciate the generosity, we still couldn’t afford $2,500, even on a payment plan!

Next, I contacted a lawyer from my small hometown, but he still was expensive, quoting $1,200 to $1,500.  As Dave Ramsey would say, “It’s not in the budget.”

A Frugal Estate Planning Option

Frugal Estate PlanningIn the end, we made a compromise.  My husband and I both knew we needed a will in place, but we didn’t have the kind of money lawyers were asking for.  Instead, we turned to LegalZoom.

For less than $250 total, my husband and I each had our wills drawn up.  We each answered a few simple questions online, and each will took less than 30 minutes to create.  Then we paid and waited for the lawyers at LegalZoom to look over the document.

Less than a week later, the wills came through the mail and were in our hands.

When we don’t have so much debt and have a larger income, we plan to get a will and trust set up in person with a lawyer.  However, for now, on our budget, LegalZoom works perfectly.  We have a will in place should anything happen.

Have you used LegalZoom for a will?  Would you consider it?  Does $1,200 to $2,500 for a will created by a lawyer seem outrageous or normal to you?

Composting; You’re Doing it Wrong

Each and every year, for the last several years, I’ve said that I plan on finding a space for a compost heap and create one.  Several years ago, I went so far as to take all of the grass trimmings and garden trimmings and dump them into a pile in the back yard.  And that’s where they sat, untended, and somewhat forgotten.  I’m still hoping that this year is going to be the year that I get off my duff and actually create the compost pile that creates actual compost.

Every year, we end up buying several bags of garden dirt for our container garden, and it would be really nice to be able to just walk into the back yard, and load up the wheelbarrow with fresh dirt from the compost pile and add that to the dirt we already have before planting our garden.  A few days ago, I spotted this TED talk, which threw my idea of compost for a little loop.  You’ll have to watch it for the full rundown, but basically, the speaker is saying that we’re doing compost wrong.

How should we be doing compost?

Mike McGrath, the speaker, suggests that the commonly held belief that you just grab all the clippings, leaves, junk mail, and kitchen scraps is wrong.  According to him, those things don’t really compost all that well because they don’t break down very easily.  Instead, he suggests that your compost pile should consist of mainly the leaves from the trees when they are shed in the fall.  All the rest, your kitchen scraps and paper bits, he suggests would be better off in a vermi-composter, or worm farm.

Compost WrongIf it’s Not Broken, Why Fix It?

The method of throwing pretty much everything into a compost bin or tumbler is a pretty old method.  It’s the way that people have been doing it, and suggesting you do it, for years.  It obviously works to some degree, or it wouldn’t have reached that point.  The first few times it failed, people would have decided it wasn’t a very good way to dispose of refuse and would have moved on to something that worked better.  In short, it doesn’t appear to be broken, so why should we go and fix it, as Mr. McGrath suggests?

I think it’s about efficiency.  If you want to take your refuse (lawn trimmings, leaves, kitchen scraps, etc) and break it down into usable compost (a.k.a. super-dirt), doing so as efficiently as possible make some sense.  Of course, most people usually choose one or the other method (everything in a pile, or vermi-composting) so I haven’t been able to find any good examples of someone doing both.  I don’t think that McGrath would have any opposition to a person adding worms directly to a compost pile.  It’s probably not as efficient as having an actual vermi-composting setup where you can harvest the castings and throw them in with the leaves.

How do you Compost?

Here’s the place in this post where you get to help out the readers of Beating Broke.  Do you compost?  How do you compost?  What do you think of separating the leaves and the kitchen scraps into two systems? Too much work?  Ideal?