Life Happens

This is a post that I did not plan to write this week.  The past few months have been a blur of emergencies, financial adaptations, graduations, adjustments, and realizations.  I have been in an interesting head-space and I wanted to share that with you all.  If you take anything away from this article, understand that life will find a way to keep you ‘on your toes.’  It’s just part of it.  Your goals, both personal and financial, should be able to ‘roll with the punches.’  Life happens. You must learn to be adaptable.  Your goals are no different. 

How things can change in an instant…

“I have been in a car accident.”  My heart sank.  Those were the words my pregnant wife spoke through the phone after leaving the house roughly half an hour earlier.  The morning started like any other.  My wife left around 6 A.M. to head to her shift.  I was at home for another hour watching our daughter and waiting for the nanny’s arrival.  That morning was the usual song-and-dance of bottles, tending to the dogs, and getting prepared for work…all while holding an 11-month-old in one arm.

My wife called shortly before the nanny arrived…hysterical.  She had been in a car accident roughly 100 yards from the emergency department she was supposed to be attending at.  She was wearing her seatbelt, but she is 23 weeks pregnant.  Her fingers were bruised and she wasn’t sure if she injured her abdomen.  Adrenaline was coursing through her veins as the emotions swelled up.  She was heading to her emergency department, but as a patient.  The car was totaled. 

My how one phone call can completely change your day.  I was distraught as I passed my daughter to our nanny and raced to the hospital.  In the healthcare profession we are often jaded by what we experience on a daily basis.  Obviously, my mind pondered every possible outcome as I bulleted toward the hospital. 

What really matters

There she was, lying calmly on the stretcher, looking worse for the wear…but safe…and beautiful as always.  We both got emotional as I came to her bedside.  I was a wreck.  The following hours were a constant stream of providers and colleagues coming by.  Blood work.  Ultrasounds. Fetal monitoring.  Hand holding…

I will spare you more details, but my heart is full as I sit here confidently writing that my wife is well (aside from a few busted fingers), and our pregnancy appears to still be safe.  We spent the remainder of the day laying low and celebrating how lucky we are.  It is unfortunate that it takes a life threatening event to force us to appreciate where we are and what we have.  I am blessed knowing that I can write and reflect on this incident knowing nothing more than a car was ruined.  What really matters is with me, safe and sound. 

My ‘Emergency Fund’ year

For those of you who missed it, I recently was featured as a guest writer in The White Coat Investor.  Here I published an article called My Emergency Fund in Action.  I wrote a lengthy story on how my emergency fund was pivotal when a tree impaled my home!  That happened earlier this year and the Spring of 2022 was full of insurance claims, re-roofing, ceiling repairs, and fresh coats of paint.  Despite our homeowners insurance paying for a significant portion of our repairs…it didn’t cover it all.  Our emergency fund was important because it allowed us to put individuals and services into action immediately without waiting weeks for insurance claims to process and pay. 

I have harped on the importance of an emergency fund for months now.  My first comprehensive post on emergency funds was titled: Emergency Fund, Your First Financial Goal.  I stand by that title.  It really should be priority number one as you create financial security.  I don’t need to waste more words in this article convincing you why.  Just follow the links above and they will do that for me. 

Following my home repairs, it took us a few months to build our emergency fund back to $30,000.  We have chosen this number for a multitude of reasons, but primarily because it is approximately 3-months living expenses (if we keep our budget tight!)  I choose to approach my finances as such.  We have a well written financial plan we adhere to.  You can read my financial plan verbatim if you wish.  However, when we pull money from the emergency fund, we then prioritize all our excess income towards replenishing it.  The world does not care if you just suffered a financial blow…that does not mean life will spare you another financial mishap because you ‘did your time.’  You should always hope for the best, but expect the worst. 

‘Life uhh… finds a way’

As life would have it, that very scenario occurred.  We had just finished returning our emergency fund to $30,000 when my wife’s car accident occurred.  Our car insurance claim is pending, but it is almost guaranteed that we will need to (again) pull from our emergency fund to afford a used car…one that can fit a family of four (and two dogs) safely. 

This will inevitably lead to our family having to withdraw anywhere from $5,000 to $15,000 (depending on our insurance) to purchase a used car large enough and safe enough to fit our needs.  As I mentioned previously, we will then spend the subsequent months working to replenish what was removed.  Ever-vigilant that another financial stressor is just around the corner.  Why is this important? Why does all this matter?

One blow after another…

I spent the last few paragraphs discussing my recent emergencies to make a point here.  This year has been plagued by one financial stressor after another.  However, I do not wish to ever be unprepared for the unexpected.  As such, our emergency fund has proven vital to our continued financial success, but it does not come without its compromises. 

One of my original posts regarded my debt aversion.  My wife and I have worked for years to pay off our $670,000 student loan debt.  We do this by maintaining a goal of paying $100,000 annually towards our educational debt.  You can actually see our progress in our article titled Graphing Our Loan Repayment Progress.  We are able to achieve this by living far below our means, prioritizing our debt, and approaching our finances as a team. 

However, as you can imagine, with all the emergencies that have occurred this year, it has proven difficult to maintain these goals.  Even as a dual-physician household, money is a finite thing.  We may have lofty goals, but in order to achieve them each year we have to adhere to a strict budget and rarely compromise.  When you are constantly replenishing an emergency fund, it can make it progressively more difficult to reach your other goals. 

It’s not failure, it’s adaptation

I have been placing (what I perceive at least) undo stress on myself as I struggle with trying to reach all of my annual financial goals.  I still want to eliminate $100,000 towards our debt as we are on the verge of completely paying off my wife’s educational loans by 2023.  Further, I want to keep my emergency fund replenished… as this year has taught us. I wish to continue to max out my retirement contributions and invest intelligently.

It is time, however, that I take it easy on myself.  There is a reason I have created such lofty goals. It is for this exact scenario actually.  This year has not pulled its punches and inflation only adds salt to the wound.  Yet, even if I only pay off $85,000 or $90,000 this year…that is still a huge achievement.  I am only hurting myself if I view that accomplishment as anything else. 

We should all learn to adapt the lens with which we view both our short- and long-term financial goals.  This year I will replenish my emergency fund…twice!  Further we will have afforded a new (used) car, and recovered from a tree impaling our home!  This will be achieved all while still putting approximately $8,300 towards our loans, monthly.  Oh, and let us not forget that I have another baby on the way.  Whew… OK I think I am done. 

How to set your financial goals

I am not an outlier here.  Each and every one of you reading this post will have a year like mine eventually.  Now, I am not wishing car accidents or home destruction upon you…far from it!  However, you will have years of your life that make it feel like you just cannot get ahead.  This is normal.  These feelings of setbacks are just obstacles you will learn to navigate around.  That is life.  Financially independent or not, financial stressors will not stop just because you earn more or are financially free. 

When you set both your short-term and long-term financial goals, understand that those are just targets.  Even if you fall short, that does not mean you failed, it just means you hit a different target.  I love the smooth, clean number of $100,000 towards my debt elimination… but $90,000 is just as good!  What is even more important is that you do not let these setbacks affect your motivation! 

It was a struggle to continue to convince myself to put money aside to maintain our debt elimination goals as each of these emergencies was transpiring.  The thought of another setback was overwhelming.  However, as I came to my senses, I realized that what would be worse would be succumbing to these feelings of fear or inadequacy.  It’s ok if I fall short of my goal. Some things are out of my control.  The most important thing is that you maintain the drive to keep pursuing your goals.  That is what truly separates individuals who eliminate debt early and build wealth from those who become complacent. 

Take home points

It took me quite some time to force myself to sit down and write this post.  I have experienced a wide range of emotions over the past few months.  I love writing.  It is quite therapeutic actually.  But between my home repairs, my wife’s car accident, and my struggle to achieve all the goals I write so candidly about, it became hard to sit down and spill my thoughts. 

Never forget what actually matters.  I touched on this briefly in a post called Plan for Forever, Live for Now.  It is funny how accurate that article was and it was written well before the events of this year transpired.  I am O.K. falling short of all my financial goals if it means the safety of my family.  Of course, I hate that it required a car accident to remind me of that.  I am very privileged to be in the position that I am, to write about the issues I find important, and to have a platform to share my story.

I may have hit a few bumps on the road towards financial independence, but it has done nothing but reinvigorated my fervor to reach my goals.  Life happens, obstacles will always arise.  Be adaptable.

In the great words of Randy Pausch speaking at the Last Lecture series, “Brick walls are there for a reason.  The brick walls are not there to keep us out.  The brick walls are there to show how badly we want something.  Because the brink walls are there to stop the people who don’t want something badly enough.  They are there to keep out the other people.”  Don’t let these financial setbacks deter you, life happens.  Power through my friends!  Power through!  As always…

Stay Motivated!

The Motivated M.D.

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