Three things happened to prompt me to write this post and make an emergency budget should there be a huge emergency, like a zombie apocalypse.
First, is that iHeartBudgets posted about creating an emergency budget which made me think of my own.
Second was this whole Sandy situation which is really, really scary.
And then, there was the fact that my partner had a couple of days off in between jobs and, staying true to my melodramatic roots, the worst possible scenarios of unemployment came rushing through my head.
So I was thinking about what my budget would be in an emergency, and it all comes down to my fixed expenses.
Now, assuming that I need to have an emergency, zombie apocalypse budget because I lose my income in the apocalypse (what? If zombies are trying to eat my brain I’m not showing up to my 9-5), my emergency budget is not including my income.
It’s a miserable way to live but it’s doable.
Here’s what I would do:
Phone, Internet and Cable
In an emergency situation, I would cut my phone bill down so I didn’t have data or any extras. This would allow me to still field job calls but I wouldn’t be able to do anything else.
My internet would stay the same. If I lost my job, I would need to look for jobs on the internet so I’d have to keep it.
We don’t have cable anyway so that would remain the same.
In a true emergency, I would sell my car and pay off my loan to make my car payment $0. Since I’ve already paid off quite a lot of my loan, I would come out ahead as my car is worth more than my loan.
If I didn’t have a car I wouldn’t have to pay gas or insurance.
I would buy a bus pass. I can’t get to work on the bus but assuming it’s an emergency because I don’t have a job, that’s not a concern.
I pay parking of about $44/month but it comes off of my paychecks and I don’t budget for it.
Savings: $664 (my $300/month insurance isn’t on my budget because I pay in lump sums).
I only budget $160/month for groceries as of right now, but when I eat out I always have leftovers which makes up probably another $40/month worth of groceries. There would be no eating out during an emergency situation so I’d be looking at $200/month groceries.
I would not do anything but free activities in an emergency situation. meaning that I’d be looking at a fun budget of zero.
Extras (Gym, Clothes, Travel, Savings, Gifts)
I would cancel my gym membership in an emergency budget, and stop buying clothes, saving for travel, and even contributing to my RRSP and TFSA.
As for gifts, they wouldn’t be happening either.
Savings: $248 (my gift fund in my above budget are much higher than that of a normal month, because of Christmas. I budget $50/month for gifts normally).
If I spent $795.00/month, and if I maintained my emergency fund of $10,000, I would get a little over 1 year of living.
This is clearly not realistic because in one year, I’d need to spend money on something other than what I’ve included in my budget (like fun) but if it came down to it, that’s what could happen.
Looking at it another way, if I was so inclined, with my $2,700 income from my job, if I still had my job and wanted to save a LOT of money, this would free up about $1,900/month for savings, or about 22,800/year. Not including my side income.
Do I want to live this way? Heck no! I’m happy with my spending right now and my ability to save a big chunk of my take home pay. But it’s nice to know what could happen if I needed it to.
How much could you save if you went bare bones?