For over a year leading up to Babe’s birth I meticulously planned how much we were going to need in the HSA and the savings account. Nothing was going to prepare me for the Friday of the missing paycheck.
Ode to HSA
We weren’t sure how much our insurance was going to cover so I made sure we had enough to cover up to our max out of pocket. After filling it up we used all but $400 of the HSA by the end of the year. This was an amazing safety net for us during the leave. We weren’t sitting and waiting for an FSA claim to be filed, I could just log into the hospital’s website and use my HSA debit card.
It was still painful to fork over so much money but seems to be the nature of the beast until the healthcare system gets cleaned up. The savings account sat waiting and ready to keep us at a normal lifestyle as our income streams dried up.
Forming A Plan
When Mini Donut was born we were in no financial position for me to take an extended leave. Going back to work was sad and frustrating which was part of the reason I wanted to make sure we were able to spend as much time as possible with Babe. I would run the numbers…way too often (probably more than I look at our net worth data or budgeting documents). Obsessive is a good word for it. Once our savings was close to the numbers we needed I became less concerned.
The best-laid plans of mice and men often go awry.
Babe decided he had cooked enough in Ms. Blue Ribbon and was going to join our family 3 weeks early. It took us all by surprise, especially Ms. BR when she was slightly in denial that she was in labor. Luckily, we had saved every dime we had needed just in the last paycheck before Babe showed up.
Early on, Ms. BR decided she was going to take a week of time off and then the full FMLA. (Family Medical Leave Act is a law that requires employers to hold your place for 12 weeks while you tend to a medical or family matter. For women, you may be entitled to some wage compensation through a short-term disability insurance but for men you are up a creek unless your employer has some other benefit covering you.)
Ms. BR was going to have to take the entire FMLA unpaid but because my employer was progress (or just competitive) I was getting 5 weeks paid.
For us, it was fairly normal to only have one paycheck coming into the bank account. When Mini Donut was born Ms. Blue Ribbon stopped working for a year before going back to work. So when her paychecks stopped and we started pulling from savings it didn’t seem too odd. It was when I stopped getting a paycheck that a weird reality set in.
I’m not being paid by anyone… For the first time since college, I don’t have an income.
Sure I have gone a few weeks between paychecks before when changing jobs but this was different. I had to keep reminding myself that we were ok and it would start again in a month or so. This is why we had saved for a year leading up to the baby being born.
Building a safety net prior to Babe being born allowed us to spend 26 weeks with him (13 each). That time allowed me to keep him out of daycare that much longer and get so much quality time. I was also able to spend a lot of time with Mini Donut as well. My biggest realization is how insanely important our little emergency fund is. The HSA and savings were essentially mini-emergency funds for a specific event but the emergency fund is this sentinel quietly standing watch over our family.
I used to look at our emergency fund and be frustrated that it was just sitting there, not being used and only making 1% interest. Now I look at it as our guardian for when everything goes south and we need a rock to stand on. It will be the first thing activated when we need a soldier to help us.
For all the plans we set out to do, an emergency fund is there for when they go awry.
How do you feel about your emergency fund just sitting there? Have been able to take a full parental leave?