It’s been an expensive few months.
I want to preface this article by acknowledging that I’m speaking from a position of privilege. I still have my salaried job, where I get to do interesting work with great people. My wife and I are debt free! Our income covers our expenses, and our net worth is steadily increasing from year to year. We are not in a bad place.
That said, it’s been a rough few months. I posted a while ago about our dog Eddie’s vet bill and tapping into our emergency fund. Well, it turned out to be the first of several expensive, unexpected vet bills. Up until this point we had been lucky and only had regular care costs, for which we budget (teeth cleaning, vaccinations, etc). But the last seven weeks have cost us nearly $3,000 in emergency and follow-up care for all of our animals.
After covering the first bill from our smaller emergency fund, which we keep in a traditional savings account, we were able to cover the rest of the bills through our normal cash flow. Until then, our year had been going really well from a savings perspective. We were focusing on two goals to start the year. But in light of the vet bills over the past two months, we have managed to make progress on one of those goals, but have paused the other entirely.
This has left me feeling stuck in place.
I have a small cost-of-living raise coming in July, but these recent expenses have me (irrationally) thinking that this pay increase won’t actually make a difference. Because we’ve had such high expenses, my mind is telling me that this is a new normal, not a blip in the radar.
Part of the problem is that we paused our progress toward our savings goals while we accommodated our vet bills in our budget. One savings goal in particular is our smallest goal on paper; currently, we only have $1,250 left to achieve it. But I was using our progress on this goal as a benchmark for our overall savings success. When we were making a lot of progress in February, March, and April, I felt really good about where we were financially. When we stopped making progress in May and June, it made me feel like a total failure. This “little” goal had an outsized impact on my perception of our savings.
I don’t feel desperate; I haven’t lost my sense of gratitude for my situation, but my motivation is flagging. I know this isn’t rational. Seeing no progress toward that goal makes me feel like we’re regressing entirely, because we were making progress before.
This is obviously something I talked over with my wife. In contrast to my own negative outlook, she feels good about the past few months. We had nearly $3,000 of urgent expenses come up in seven weeks, and we were able to handle them mostly through our normal cash flow, rather than tapping into our larger emergency fund (which is invested in a taxable account). To her, that is a win worth celebrating. But she understands where I’m coming from and wants to support me so that I can share her positive outlook.
Takeaways from our conversation:
- I gained some perspective. Talking through this with my wife helped me realize that instead of looking at the actual numbers, I was relying on a somewhat flawed measure of success. If a rough few months simply means not making progress on your secondary goal, that isn’t a bad place to be. It is almost time to sit down and recalculate our net worth. Seeing measurable progress in our net worth will help me really put things into perspective.
- We’re going to finish off that goal. Over the next few months we’re going to make that currently-paused goal our primary goal. We’ll revisit all of our savings goals in light of recent events, but after the past few months, I need a win. Finishing this goal off will help my motivation to keep working toward those other goals. Dave Ramsey has a similar approach to debt, which he calls “snowballing.” We’re doing that with our savings goals: working toward the smallest first (even though long-term it may not have the biggest impact on our total net worth), just so we have the psychological satisfaction of a win after a rough few weeks.
- We should keep talking about our money. As we were making decisions about how to pay the vet bills, my wife mentioned that these sorts of expenses–not entirely unexpected, but those which will inevitably arise without notice–are exactly why she saves. I see the larger emergency fund, which is invested in Betterment, as something to use only in the event of job loss. We’re going to reassess how much cash to keep on hand.
We’re hoping that we’re through with the expensive vet visits for now, for reasons that clearly reach beyond the impact to our wallets–we’re ready for our pets to feel well!