Murphy’s Law states that anything that can go wrong, will go wrong.
And while it’s always painful to end up on the receiving end of this saying, it’s usually most painful when it involves your finances. Even if you have an emergency fund to back you up.
I learned that myself just last month. I had just taken a big career leap (and risk) by quitting my full-time job as director of marketing for a financial services company and becoming a freelance writer and content marketer.
And while I still believe this move was the best one for me to take to achieve my business and financial goals, it’s hard to hang on to that sentiment in moments of financial crisis.
On my first day of full-time self-employment, my boyfriend and I had to rush our cat to the animal hospital. He had emergency surgery and a seven-day stay in the medical center.
And when we finally picked him up, he came home with a $5,000 bill for his treatment and care.
Expecting the financially unexpected
Before we go on, my kitty is back home and doing well. In fact, he’s happily snoozing on the chair next to me as I write this.
But that massive vet bill did nothing to ease my financial concerns.
I already had anxiety surrounding my departure from a steady paycheck to becoming 100 percent responsible for making enough money to cover my expenses. I felt like I had failed before I had even begun.
What’s more, I was already questioning if I would ever make enough on my own to go from “good income” to “building real wealth.” Would I always be scrambling for cash when something unexpected came up?
Thanks to some financial planning, I had $11,000 in emergency savings that took me years to build. But even with my emergency funds, the vet bill was a tough financial blow.
It led to a week of stress, anxiety, and tears as I worried about my pet and my future financial state. Yes, it was a relief to use my emergency fund and not worry about budgets or a newly unstable income.
However, it’s still painful to see that money leave. Even when it’s earmarked for exactly this kind of situation.
That’s the first thing I learned about getting hit with this huge expense: it still hurts to say goodbye to that money forever.
Making expensive, emotional decisions is not easy
Since this cat already racked up a similar vet bill in the past ($8,500 to be exact), I tried to draw a line in the sand back then. I said that I would not pay more than another $3,000 on medical expenses for him.
It sounds harsh, but I felt like it was the financially responsible thing to do. At the time, I was 24 years old and could not imagine ever having the kind of wealth that would allow me to continue dropping thousands on a pet.
However, while I had already made this “rule” that favored financial responsibility over my emotions, I broke down in tears when the vet gave me the estimate for this time around. It was over my financial limit I set for all pets. That meant the end of the road.
Yet, as much as it scared me to part with the money, there was no way I would tell the vet to euthanize my pet. Saying one thing about your money and doing another when emotions are involved is nearly impossible at the moment.
I learned a few things from this less. The first being financial responsibility does not trump family. And my cat is a family member.
The second lesson I learned is that you must prepare financially if you don’t want to make an emotional decision based solely on money.
Having an emergency fund — one that’s large enough at that — allowed us to make decisions free from restrictions about how much we could afford.
We all have a mindset around money
I write about personal finance for a living, so I basically live and breathe all this money stuff.
Yet, I had always dismissed the idea that I could have a mindset around money that was negative or detrimental.
However, this experience wiped that thought from my brain. I learned I absolutely do let mindsets, fears, and stories I make up about money take over and influence how I feel.
I have a scarcity mindset around money. This leads me to constantly feel anxious about running out of money or worrying that I’ll never have enough.
So when I took a hit in my emergency fund, I started thinking things like, “How will I ever afford to buy a home?” And, “I can’t dedicate money toward that goal because I only have so much and now it needs to go towards rebuilding my emergency fund!”
Money comes and goes (and that’s okay)
Essentially, I fail to recognize when I operate with a recency bias. This means I think the way things are now is how they’ll always be.
Therefore, I assume because I experienced a financial blow and now face rebuilding my savings with my self-employment earnings, I’ll always be looking at an uphill battle when it comes to money.
But the reality is, that’s not really the case.
This experience also helped me shift some of those money mindsets. I realized that I’ve spent the last 10 years of my life actively making money. That I’ve actually been succeeding at it.
It hasn’t always been easy. I haven’t always made enough (or what I wanted to make). I also haven’t always been happy with my financial situation or felt like I was making progress.
But I know how to make money. And if I operate from an abundance mentality, that means I believe there is enough out there for me to have a piece of that sweet money pie.
Ultimately, the point here is that what you think influences how you act and the way you perceive the world.
So if I act from an abundance mentality, instead of a scarcity mindset, and believe in my ability to generate more money, I’m more likely to remain open to possibilities. I’m more likely to see and act upon opportunities.
That, in turn, can lead to a financial abundance. When money flows out, that’s okay. I can always make more. It just takes some time.
Your earning potential and emergency fund is unlimited
Thinking from an abundance mentality also allowed me to see that my move to self-employment was still the right one.
I thought about what it would still be like if I were still working my day job. No matter how many hours in a day I worked, at the end of the month I’d still make the same amount of money.
I had received a paycheck from a set salary. And, there was no room for growth unless someone else decided I earned a little more on an annual basis.
But this month, I turned my willingness to work and hustle into extra income. I looked for additional gigs and filled my schedule to the brim in order to generate more money that I can use to rebuild my savings and emergency fund.
Self-employment can be scary and make you feel like you work on shaky ground. But this experience reminded me that there’s more stability — and possibility — than I think.
Ultimately, it took a $5,000 vet bill to remind me of the simple power of thinking positively and working hard. I can claim my share of responsibility for how I feel about money, the way I earn it, and what I want to use it for.
While it hurts to part with a massive sum like that, I feel more empowered around money for acknowledging my fears and worries, then letting them go.
I am now ready to move forward with a happy cat and a world of opportunity to build wealth throughout my life.
Interested in a personal loan?Here are the top personal loan lenders of 2020!
|Lender||APR Range||Loan Amount|
|1 Includes AutoPay discount. Important Disclosures for SoFi.
2 Includes AutoPay discount. Important Disclosures for Opploans.
Direct Deposit required for payroll.
Opploans currently operates in these states: . *Approval may take longer if additional verification documents are requested. Not all loan requests are approved. Approval and loan terms vary based on credit determination and state law. Applications processed and approved before 7:30 p.m. ET Monday-Friday are typically funded the next business day.
3 Includes AutoPay discount. Important Disclosures for Payoff.
4 Important Disclosures for FreedomPlus.
5 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
6 Important Disclosures for LendingPoint.
7 Important Disclosures for LendingClub.
All loans made by WebBank, Member FDIC. Your actual rate depends upon credit score, loan amount, loan term, and credit usage & history. The APR ranges from 6.95% to 35.89%*. The origination fee ranges from 1% to 6% of the original principal balance and is deducted from your loan proceeds. For example, you could receive a loan of $6,000 with an interest rate of 7.99% and a 5.00% origination fee of $300 for an APR of 11.51%. In this example, you will receive $5,700 and will make 36 monthly payments of $187.99. The total amount repayable will be $6,767.64. Your APR will be determined based on your credit at the time of application. The average origination fee is 5.49% as of Q1 2017. In Georgia, the minimum loan amount is $3,025. In Massachusetts, the minimum loan amount is $6,025 if your APR is greater than 12%. There is no down payment and there is never a prepayment penalty. Closing of your loan is contingent upon your agreement of all the required agreements and disclosures on the www.lendingclub.com website. All loans via LendingClub have a minimum repayment term of 36 months. Borrower must be a U.S. citizen, permanent resident or be in the United States on a valid long term visa and at least 18 years old. Valid bank account and Social Security number are required. Equal Housing Lender. All loans are subject to credit approval. LendingClub’s physical address is: LendingClub, 71 Stevenson Street, Suite 1000, San Francisco, CA 94105.
†Per reviews collected and authenticated by Bazaarvoice in compliance with the Bazaarvoice Authentication Requirements, supported by anti-fraud technology and human analysis. All reviews can be reviewed at reviews.lendingclub.com
**Based on approximately 60% of borrowers who received offers through LendingClub’s marketing partners between January 1, 2018 to July 20,2018. The time it will take to fund your loan may vary.
8 Important Disclosures for Earnest.
9 Important Disclosures for Avant.
*If approved, the actual loan terms that a customer qualifies for may vary based on credit determination, state law, and other factors. Minimum loan amounts vary by state.
**Example: A $5,900 loan with an administration fee of 4.75% and an amount financed of $5,619.75, repayable in 36 monthly installments, with an APR of 29.95% would have monthly payments of $250.30.
Based on the responses from 11,574 customers in a survey of 210,584 newly funded customers, conducted from 1 Feb 2018 – 1 Aug 2019 95.05% of customers stated that they were either extremely satisfied or satisfied with Avant. 4/5 Customers would recommend us. Avant branded credit products are issued by WebBank, member FDIC.
* Important Disclosures for Upgrade Bank.
Upgrade Bank Disclosures
* Personal loans made through Upgrade feature APRs of 6.98%-35.89%. All personal loans have a 1.5% to 6% origination fee, which is deducted from the loan proceeds. Lowest rates require Autopay and paying off a portion of existing debt directly. For example, if you receive a $10,000 loan with a 36-month term and a 17.98% APR (which includes a 14.32% yearly interest rate and a 5% one-time origination fee), you would receive $9,500 in your account and would have a required monthly payment of $343.33. Over the life of the loan, your payments would total $12,359.97. The APR on your loan may be higher or lower and your loan offers may not have multiple term lengths available. Actual rate depends on credit score, credit usage history, loan term, and other factors. Late payments or subsequent charges and fees may increase the cost of your fixed rate loan. There is no fee or penalty for repaying a loan early. Personal loans issued by WebBank, Member FDIC.
** Accept your loan offer and your funds will be sent to your bank via ACH within one (1) business day of clearing necessary verifications. Availability of the funds is dependent on how quickly your bank processes this transaction. From the time of approval, funds should be available within four (4) business days.
|5.99% – 18.82%1||$5,000 - $100,000|
|6.53% – 35.99%||$1,000 - $50,000|
|6.98% – 35.89%*||$1,000 - $50,000|
|99.00% – 199.00%2||$500 - $4,000|
|5.99% – 24.99%3||$5,000 - $35,000|
|5.99% – 29.99%4||$7,500 - $40,000|
|6.79% – 20.89%5||$5,000 - $50,000|
|9.99% – 35.99%6||$2,000 - $25,000|
|6.95% – 35.89%7||$1,000 - $40,000|
|5.99% – 17.24%8||$5,000 - $75,000|
|9.95% – 35.99%9||$2,000 - $35,000|