Things have been tight for several years now. I was on reduced hours for 18 months in the 2008-09 time frame. Just got out of that and then She Who Lets Me Make Her Coffee Every Morning (SWLMMHCEM) was diagnosed with Breast Cancer in 2010. Just over a year later, SWLMMHCEM was given in an ultimatum; either quit her job or be fired if she went to North Carolina to help with a family medical emergency. She quit.
We’ve managed okay. Not the greatest and not moving ahead but staying afloat. During this time, we’ve drawn some on our savings to get by. We still managed to keep our “financial preps” in place to a large degree.
Really glad we did.
Last month my term life policy expired and my premium previously around 80 bucks was set to sky rocket up — a standard ploy to get people to renew for another term apparently. Miscommunication and other issues occurred while we tried to get approved for another term life policy. In January the insurance company took advantage of the automatic draft feature we set up previously. The new premium (12.5x the old one) was drafted out of our account.
Got on the phone with the agent again; finished setting up appointments, etc — and was assured the increased premium would be refunded. Time goes by, no check. Appointments kept, medical screening done; no check.
We were stressed but not too bad. We moved money around from one account to our checking account to cover.
–This is where a strong ready reserve of cash / cash equivalent (money market account) comes in handy and is one of the first preps people should put in place IMHO.
Agent came over for me to sign application for new term policy and I had to write a check. Given strain on finances; we decided to make sure it wasn’t going to bounce. Good thing we did.
The insurance coming not only hadn’t gotten our refund out; they drafted our account again for the increased premium !
That was last Thursday. We were literally all out of money.
Again; preparation takes many forms including using a financial institution that offers over draft protection. We use such an institution.
We also had to manage for 5 days with no money in our checking or savings account. While working, running errands, etc. Several things could not be ignored; such as cars needing gas or phone bills being paid (family medical issues make cells mandatory).
Thankfully we not only had money in the bank; we had emergency cash on hand. Hated having to dip into it but that’s what it is there for, right?
So we dipped into our emergency cash — the second most important financial prep I think people can set up. Having money set aside; designated not to be used for minor or trivial purchases kept us going.
Luckily we have a very good agent and an insurance company now sufficiently motivated to make things happen. The refund was wired to our account. Not only did they refund the premium but they included money to cover the overdraft fees we incurred.
I share this tale not to elicit sympathy but to highlight the importance of being prepared. While we work toward major disasters or SHTF scenarios; it really is the day to day life issues where prepping really makes a difference.
We aren’t paranoid because we are prepare; it really is just common sense.