Most financial gurus advise that you should have an emergency fund of at least six months of expenses. This is really good advice. However, I feel like the emergencies are expected to stop while I build my fund. As if there is a pause button that we can press then click resume when we are all saved up.
Maybe it is just me, but sometimes it does feel like the emergencies pop up every month, every week or sometimes every day. I am not thinking about black tax which I write about here because fixed bills are something that we can plan and budget for.
For those of us from communities where we are expected to help out family and friends, this means that we are continually responding not just to our emergencies but those of our family members and there we have a lot less control.
For our households we can put several protections in place like
- Car insurance to cover you in case of an emergency
- Health insurance and the various FSA/HAS plans for health care emergencies
- Life insurance
- Short- or long-term disability
If we get sick (knock on wood) we will most likely not go bankrupt. If we are in a car fender bender, we are covered, but this is not the case for our families back home. For most of us in the diaspora or if you are the one earning a little bit more, you are the emergency fund.
There are no safety nets in most African countries – maybe I can speak to the Zimbabwean experience, but I know this is true for friends in Ghana, Nigeria, Kenya, etc. I read a recent blog post that said when you return home to the continent be prepared to be your own state providing electricity, clean water, and I would even add sometimes managing road construction.
The hard thing is that a lot of the emergencies that find their way into our phones are real emergencies. People get sick; people are in accidents (thanks to poor infrastructure and overcrowded taxis), parents are asked to top up tuition because the economy sucks. Someone finds themselves with a considerable shortfall for a life-changing opportunity because the economy tanked.
Let us list some acceptable emergencies for you to agonize over
- Health –
- Death – death is terrible and often unexpected even when it is it is honestly a crappy thing to deal with
- A home disaster like a fire or flooding – even in cases where one has good insurance payouts take a long time to come. This is just a terrible situation to find oneself in
- Job loss in a crappy economy
It is important that we also clarify things that do not count as emergencies for which you should feel 0% guilt for saying no to. Say no for any of these requests that come with a 48-hour window for your response.
- Wedding contributions- I will give a wedding gift, but I will not contribute to solicited requests for group funding. No one is required to get married. Literally no one.
- Tuition – for the child or the parents. Seriously, my mother was a cross-boarder trader who paid my tuition. No-school fees is not a surprise except if a parent dies, then I think God calls on us to support orphans.
Trips – what is with all these never-ending church trips? If papa prophet wants you to take a trip, then he should pay for it. If you cannot pay for a trip, then it is not in your spiritual path to go on the trip.
- Baby things – I will buy a gift, but parents have nine months to prepare for a child unless the ask is for health-related matters then yes! Agonize and pray over this. We do not want babies to suffer.
- Fixing a broken car – yeah no
- Home improvement – def say no. Also, if you do not own a home, you have no business involving yourself in people’s home projects.
- Insert yours here
Of course, these are my lists. Even with these lists, I still agonize over the asks that come my way. The reason you need to have a list is so that you can quickly decide if the request is something you should stress over, especially when funds are tight. Do not take any debt to cover the non-emergency list because that is not a smart thing to do.
How do we budget for emergencies that are not ours?
- Set aside 10% of your income forgiving. It is your choice if you do so before or after tax. If you are in a position to give, please do give. It is very good for your mental health.
- Distribute your giving income between areas that you value – for me; it is church and family/friend emergencies.
- If you lose a parent or your parent is not well, you also have the option to borrow from you Roth, but this is the last resort. If it is within your means, get health insurance for the parents and some life policy.
How do we work towards saying no?
- This is hard, and there are no easy answers
- Write your $0 budget. If you do not have the money, you will not be lying if you say no
- Be honest with people on why you are not able to help at that moment
- If the above does not work, then make a list of who you can turn to in an emergency – if the list is blank then you really need to save up for that emergency fund.