Reality check: “Money Diaries” Shows Emergency Funds Are 100% Necessary

By Elizabeth Roberts

Elizabeth Roberts became a Financial Gym client in 2017. She is a contributing writer to Financial Gym’s blog, “Financially Free”.

This post is a continuation of her October 7th post, “Refinery29 Money Diaries is the Book for the Voyeur in All of Us.”

I was feeling pretty good about my money diaries log, which I had been keeping for a week upon reading the book. Then, on the last day of logging, my boyfriend texted me with some news.

Primera Airlines had just declared bankruptcy. Which was not so great because they owed me 3000 euros. That’s about $3,450.

In July, my boyfriend and I flew to London for my friend’s wedding. We decided to end our trip in Paris to get a cheaper return flight and see a new city in the process. Our Primera Airlines flight from Paris to New York seemed like an amazing deal - $1,000 less per person than other airlines. Fast forward to the Paris airport where we endured:

A)   A five-hour flight delay.

B)   A mysterious food voucher that didn’t materialize for three hours.

C)   A notification that the Primera flight is now canceled. We could get 1,500 euros each if we booked with another airline as payment for the cancellation. One seat on the next flight out with United Airlines would cost $1,960. I paid for two tickets on my card (my boyfriend Venmo’d me for his half) so we could lock in getting home ASAP.

D)   All of the above.

I think you’ve guessed by now the correct answer is D.

I’ve spent the last three months trying, unsuccessfully, to get my money back. I have an Aug. 15 email from a Primera representative confirming I’d get the money in four weeks. Sept. 15 came and went with no refund. So, I stuck to a routine: every week I’d email them and ask for an update. You may be asking, “Why not call?” Turns out that Primera doesn’t have a billing department you can talk to, just a customer service number that “doesn’t handle those issues” and promises you’ll get your money by the end of 2018. And that brings us up to date with Primera declaring bankruptcy!

I immediately texted my Financial Gym trainer, Alicia, who advised me to call my credit card company I purchased the Primera flights with. Of course they wouldn’t be able to refund the 3000 euros Primera owed me but they did refund the cost of our Primera flights – less than half of what Primera owed us but definitely better than nothing.  

I’m angry about the money I lost but it could have been worse. I could have been one of Primera’s passengers stranded and sleeping in the airport when the news hit of the company closure. If I didn’t have my emergency account that took me a year to fund, I would have lost my s**t for a lot longer than two (okay, three) days.

Lindsey writes that instead of calling it an emergency fund, we should start thinking of it as a freedom fund. “Freedom from staying awake at night and worrying about an unexpected medical bill. Freedom to leave a terrible boss or relationship,” Lindsey says. “Freedom to get up every day and move through this crazy, unpredictable world with the confidence that if things get really bad, you have the financial means to take care of yourself.”  

So how much should be in your emergency fund? Lindsey advises, “Three to six months of fixed living expenses (rent, utilities, healthcare, etc.) If you were to lose your job and needed to access these funds while you looked for a new one, you’d seriously cut back on flex spending.”

Whether you call it an emergency fund, a freedom fund or a F-U fund, this account is necessary. It’s a testament to the fact that you can’t predict life’s obstacles. It may not be a lost job, perhaps it’s a Europe trip from hell. They can sink my bank account but they can’t sink my spirit. It’s a F-U fund, indeed.  

To learn more financial wisdom from Refinery29 Money Diaries, register here for the Oct. 16 Financial Gym fireside chat with Lindsey Stanberry. You can also schedule a free consult and learn about FG membership options.

Caitlin Lyttle