Did I ever tell you about the time I got a notice from a debt collector? No, this wasn’t a mistake in my youth. It was last May. I was quite surprised. I always pay my bills on time. My family lives below our means. I’m the one who pays all the bills in our family. I would know if I missed one, right?

My first thought was that this letter must be a scam. I went to the internet and independently verified that the company was a legitimate business. I called them to get more details on the bill I supposedly never paid.

It was an even bigger surprise to learn that I had a legitimate medical debt from almost two years earlier. You see I fell off my bicycle in rather spectacular fashion back then. This resulted in an ambulance ride, a four-hour surgery in the ER, multiple follow-up appointments and physical therapy. Somewhere along the line one of the providers never got paid.

I honestly don’t remember ever seeing a bill, but that’s okay. The debt collector offered to settle it for pennies on the dollar. I was happy to pay it and move on. I hope I made that debt collector’s day – easiest payment ever.

This unexpected expense was easily covered by the rainy-day fund. That’s why I have a rainy-day fund. It builds a little margin for error into my family’s finances. I hope you have one too. It should cover 6-9 months’ spending. Build up to that over time if you need to.

About the Author:

John has more than ten years experience as an Investment Advisor. He focuses on devising and maintaining portfolios that meet individuals’ needs, investment research, and investment strategy. John has been recognized as a “FIVE STAR wealth manager” by Twin Cities Business Magazine 2016-2020.

Legal Disclaimer: These posts do not constitute an offer or recommendation to buy or sell any securities or instruments or to participate in any particular investment or trading strategy. They are for informational purposes only. CTW gathers its data from sources it considers reliable. However, CTW makes no express or implied warranties regarding the accuracy of this information or any opinions expressed by the author and may update or change them without prior notification.