Murphy’s Law and Emergency Savings

7 May 2012
By Adrianna Domingos-Lupher, AFC®
Owner, Military Money Chica, Personal Finance Blog

I’m sure you’ve all met my friend, Mr. Murphy.  He’s a frequent visitor to our home and is notorious for showing up when we least expect it.  Mr. Murphy can be quite an expensive houseguest with little regards as to how his actions will impact your finances.

Murphy’s Law Hits Home

Mr. Murphy’s most infamous visit to our home took place just as we bought our brand new front-loading washer and dryer.  As we basked in the glow of our newly purchased and installed clean machines, Mr. Murphy dropped by.  Unannounced.  As usual.  And when he visited, he really settled in.  Within a month of our large-scale washer/dryer purchase our sprinkler system pump broke AND our air conditioning compressor bit the dust.  Thanks a lot, Murphy.  Thanks. A. Lot.

The total damage of the trifecta: $1200 washer and dryer (planned purchase), $600 water pump (unplanned), $600 A/C compressor (unplanned). 

How on earth were we going to pay for all of this?  Granted, we’d set aside money to cover our washer and dryer, but we still had a bit of sticker shock.  It was no small purchase.  When the water pump and AC went, it just felt like a bad dream. 

I don’t know about you, but I hate spending money I didn’t plan to spend.  It just hits me in the pit of my stomach. 

Fortunately, I was one step ahead of Mr. Murphy.

Emergency Savings: Your Best Defense Against Murphy’s Law

Since Mr. Murphy seems to find us everywhere we go, I decided to get smart and outfox this personal finance boogeyman.  Two words: Emergency Savings. 

Emergency Savings is the most valuable tool you have to make the unpredictable predictable.  Given today’s volatile financial climate, you should set aside at least 6 months worth of your living expenses in a savings account.  I know that savings accounts have meager interest rates, but you’re not looking to make a return on these funds.  You’re looking for liquidity, or easy and quick access to your funds in the event of a real life emergency. 

The great thing about an emergency savings account is that it is a constant work in progress.  You may be in the midst of working towards your 6 month cushion when Mr. Murphy shows up and you have to dig into your savings stash.  That is okay!  That is what it is for!  The great thing is that the money is there.  The most important thing you can do for your financial security is to systematically set aside money into your emergency savings account every month. 

Emergency Savings Tips:

  • Don’t trust yourself to have easy access to transfer money from your savings account to your checking account?  Keep your emergency savings account at a different bank.
  • Don’t underestimate the power of setting up an allotment from your LES through  Out of sight is out of mind!  You won’t even miss it!  Remember the $100/month to the GI Bill?  Did you miss it?  Probably not.
  • Pay yourself first!  Set emergency savings account as an automatic “bill” you pay each month from your checking account.
  • If your emergency savings takes a hit, don’t stop saving!  Even if you can’t foot the bill for the entire cost of a financial emergency, being able to cover some of the cost is better than nothing.
  • Worse comes to worse, don’t forget about military aid agencies like the Air Force Aid Society, Army Emergency Relief Society, Navy Marine Corps Relief Society, and Coast Guard Mutual Assistance.  They provide emergency assistance to military families through grants and interest free loans.  Visit their websites for more information.


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