As a homeowner, I can vouch for this.
In January--you know, that cold, cold month right after you've spent your every last dollar on Christmas--I needed a contingency fund. Within a two-week period my furnace required a new element at 9:30 at night on the coldest night of the year to that point. (-20 or something equally ridiculous) Then my water tank stopped heating water. The spring in my garage door broke.
The truck I was driving had the transmission go out on it. My water pipes froze leaving only cold water running in the kitchen and (thankfully) the toilet flushing in the bathroom. Nothing else worked at all. My computer stopped working--wouldn't power on. And I'm talking about the tower one, plugs into the wall, not a battery operated laptop. Then my refrigerator decided to play temperature roulette, bouncing from 28 degrees to 60 degrees. By the time it's cold control had completely died I'd thrown out everything but my mother's homemade black raspberry jelly.
I bet you can fathom a guess at how much those two weeks cost me.
Then the all-knowing bosses at my part-time day job cut everyone's hours because, you know, business is slow. I'm a barmaid at the canteen of a local VFW. (Hello...our clientele is largely considered elderly. and:
1.) They don't like to get out and drive when its dark.
In the winter time, it gets dark very early. Like 5:30. Ergo, second shift starts at 4 and ends at 6. What??? (exaggeration)
2.) They don't like to drive when the roads are bad.
There's already twelve inches of the fluffy stuff on top of an inch of ice out there and the weatherman says we're gettin' six more tomorrow?
3.) They don't want to leave their homes when it's cold.
Cold? The wind chill is like -35 degrees. They aren't coming back until APRIL!
Part of an already part-time payroll sucks.
So, boys and girls, (here's your kick in the butt...) HAVE a contingency fund. Say it with me,
"A contingency fund is imperative."
I had an emergency cash-stash. (I did not know it could be called a contingency fund, but will be from now on.) It's gone now, but it saved my ass. Resisting the urge to dip into it for Yule presents, saved my ass. Making my own coffee instead of buying it from the barista (sorry Moore) saved my ass. Coloring and cutting my own hair and not paying the salon stylist saved my ass. Not having cable tv saved my ass. Not buying those pretty clothes I lusted over at the mall saved my ass. Getting movies on DVD from the library instead of taking the kids to the theater saved my ass.
And I didn't die, fall into withdrawals, have fits of rage, or go postal without those things. What I did was take care of each problem as it arose and hoped that was the end. I might have added a bit more than usual of the Kahlua or white chocolate liquor (or both) to my java...but all in all it wasn't nearly as stressful as it would have been without the contingency funds.