Sunday, 26 March 2017

Breathing Room Money


I've heard this called something else involving a common expletive but you know what I mean.   Some people also think of it as a financial cushion or an emergency fund but it is more than that.    It's for the more major hiccups on the road of life that for some people end up being a chasm  from which it takes years to claw their way back up to the road.   I read an article a while back in (I think) The New Yorker about people who went from parking ticket to destitution and jail in relatively short order.   I think the article was more about the country's justice system and the delegation to private collection agencies and their unreasonable power.  For people living on the margins financially and earning $7 an hour a $200 parking ticket is an impossibility.     When tickets are farmed out to a private service with few scruples it becomes nightmare.   Every month without full payment adds a $35 service charge plus interest.   Other made-up charges accrue and before long the amount owing is in the thousands.   A couple of months in jail for failure to pay means eviction from your home and your children in foster care.    You develop a chronic illness in the jails and your children pick up criminal habits while in care.  Was the $200 parking ticket worth it to the state?

Usually 3 to 6 months is suggested as a financial cushion.    Back in the days when money was worth more I had the goal of accumulating $10,000 as the amount that I figured could support my family for a year of frugal living.   Attaining this goal was a tremendous relief.    I couldn't imagine a calamity that I would not be able to solve in a year's time.   For me it was similar to what some people feel with an insurance policy but for me, I knew for sure the money was mine and would be there for me should the need arise.

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