Near the end of 2015, just two weeks before Christmas, I got a call from my tenant that the sewer pipe in my old house had backed up. Backups occurred almost annually there (I lived there for 10 years before renting it out)—so this wasn’t a surprise.  I just hoped this wouldn’t be “the big one.”  After clearing the line, the plumber told my tenant something ominous: they weren’t sure if their work would hold due to tree roots clogging the pipes.  It was time to hope. 13 months prior (right before renting the house) it looked very bad then too, but the work lasted a year.  In this case, I was cautioned there could be more problems in as soon as a few days.

Just three days later, the same blockage came back.  It was time to buy into a “liquid solution” where a liquid pipe solidifies inside a damaged existing pipe.  At a cost of several thousand dollars, this was a nasty financial hit, but there was no choice.  It would bend my emergency fund pretty severely.  Then came the Monday morning phone call.  The pipes were broken and had to be replaced and would cost triple the initial solution.  My emergency fund was completely exhausted, and I owed a lot more, too. After some negotiation and discussion, I was able to get the price reduced to a “bargain” rate of around seventeen thousand dollars.  The project manager seemed to assume I would have that kind of money ready to go in my checking account.  What?  Does anyone?  Furthermore, I just bought my current home the previous year.  My cash reserves were already at low levels.  What do I do?

For the first time in my adult life, I had to take out a personal loan, which I did for a little more than half of what was owed.  I put the rest on my credit card, as there was really no choice in the matter.  Since that time, I have become sensitive to interest rates and making sure I was putting a little extra where I was paying the highest rates of interest.  I became much more aware of offers and rates that target people who carry balances.  I educated myself on desperate options I could have taken but didn’t, such as borrowing from my 401k or liquidating investments. 

I am generally a saver, but even hardcore saving wouldn’t have helped me avoid this situation.  In retrospect, I should have at least thought more about what I would do if “the big one” happened.  For sure, the signs were there.  I am very thorough with financial planning, but was forced to act immediately here.  It is easy to budget for present needs, or even the future.  But sometimes, you have to think about the “what ifs” as well.  As a company, Sikorsky Credit Union helps people plan for financial futures.  But contingency planning?  It’s been said that nearly half of Americans can’t afford a surprise $400 bill.  Then what happens when you are confronted with something that is more than 40 times larger than $400? The pipes are fixed and new (with a 25 year warranty.)   And I have learned that budgeting and preparing for the unexpected should be part of everyone’s financial plan.