Learn from my financial cat-astrophes

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We all need to be ready for financial shocks — those unexpected, everyday emergencies that can wreck your budget.

Nearly two-thirds of households (60 percent) had at least one financial shock in 2014, and more than half struggled financially after paying for it.

At my house, we’ve had more than our share of financial calamities. I’m a little ashamed to say that for each one, we too quickly turned to our savings and yanked a few thousand out.

Did I say financial calamities? Cat-astrophes is more like it.

Our decision-making was far from purr-fect

Take our 15-year-old cat, Toast. Please. (Couldn’t resist.) A while back, she swallowed some dental floss or ribbon and was not her usual self. The first expert I called was my sister, who is a cat whisperer and also a panicker-in-chief. “She needs emergency surgery!” she said. “She could DIE!”

We watched our black, domestic shorthair carefully for a few hours and then called a vet, who was more than happy to tell us to bring in the cat ASAP. So we did, and the X-ray didn’t really show anything. Big surprise. It was surgery for Toast.

Some $4,000 later, we brought her home.

We should’ve hit the ‘paws’ button

Instead of agreeing to the surgery, we should’ve called a few friends, relatives and medical professionals to get more opinions. A few more hours likely wouldn’t have made much difference anyway.

My cousin (a doctor, for humans) told us he solved his cat’s blockage by force-feeding the animal regular canned cat food. “Saved me thousands,” he said.

When I look back, I believe it would have been worth trying. It certainly would have been easier on our finances — and I’d rather see the money invested, if possible.

Over the years, cats have cost us a lot of money. One cat ruined the carpeting in a rental apartment. Another had a medical condition, and we spent the money to cure him because the procedure had a very high success rate.

Bottom line: Deciding how to handle cat crises and other money emergencies is a personal decision. Some people live without a dishwasher when that appliance goes, and others wouldn’t dream of washing even one dish by hand. Some people think it’s crazy to spend money on a pet, and some people think it’s crazy not to.

You’ll discover your limits when the time comes. And you’d better be ready to handle the potential financial consequences.

Tip of the week: A budget is personal

It’s your budget, not someone else’s.

“Don’t follow anyone else’s figures,” says Marjorie Hillis in “Live Alone and Like It,” a lifestyle guide from 1936. “Make your own based on your own pet economies and extravagances.”

You can use a lot of different budgeting methods. What works for you? What appeals to you? That’s the method that will likely work best.

If an Excel spreadsheet makes your teeth clench, use paper and pencil, or try an app. If colored markers make your heart sing, buy a set so you can track household spending in blue and your vacation savings account in purple. Have fun with it!

New to budgeting? Here’s how to start

This week in Money Masters, Bankrate’s exclusive Facebook group, a reader wanted to know about different budgeting methods and the best way to start.

Begin with two basic questions:

  1. How much is coming in?
  2. How much is going out?

Make a list of your fixed monthly expenses — things like your rent or mortgage, student loan payments, credit card debt, etc. Next, track your daily expenses for a couple of weeks by writing down everything you spend, no matter how small. Some people think you need two months of info, but a few weeks can give you a good baseline.

After you’ve tracked your spending, use those figures to predict how much you’ll spend in the future. Identify places where you can cut back your spending, and then put the money you save into a savings account or money market account.

If you aren’t yet a member of Money Masters, join today! You can ask questions and get personalized advice from some of the sharpest minds in personal finance.

Follow me on Twitter: @jill_cornfield

Jill Cornfield

I'm a reporter at Bankrate, talking retirement – my own as well as yours. Sign up for my free newsletter.