Everyone is familiar with Murphy’s law. It basically says that if something can go wrong, it will. Popular radio talk show host Dave Ramsey also warns listeners that if they buy a house while they’re broke, Murphy will “move into the spare bedroom.” My favorite Murphy’s Law revision:

You cannot successfully determine beforehand which side of the bread to butter.

If you could, you wouldn’t need an emergency fund.

As discussed in Rule One of the Four Rules of Cash Flow Management, 70% of Americans live paycheck to paycheck. This means that if something unexpected comes up, they’re broke. All of a sudden they’re behind on their car payment, Mastercard payment, Visa payment, Discover payment, and worst of all, house payment. Rule One teaches us to lag one month behind with our expenses. What we make in January, we spend in February - you know the drill.

You might consider finishing off the emergency fund soon after. Mr. Murphy is the reason we do this. When the transmission goes out on your car, you have a couple grand saved in your emergency fund to take care of it. If your child breaks an arm you have the money to take care of it. If you lose your job, you have the money to take care of it. Remember, if something can go wrong, it will. I addressed the question of why people desire to live so close to the edge in Paycheck to Paycheck. I didn’t come up with the answer to that question there and honestly I don’t know if I ever will.

“Meet Murphy”, however, is not about getting your emergency fund together. You already know you should do that. This is about the strange phenomenon that takes place once you do have your emergency fund in place.

Perhaps you also have noticed that bad things seem to happen to those who are unprepared. Perhaps the Powers that Be have made it so. Declared in the beginning: “Those who are unprepared shall be punish-ed!” I don’t think so. For the most part, emergencies tend to come up in the lives of unprepared people because they are unprepared. Let’s see if an example will drive this home.

Scenario One: Steve lives paycheck to paycheck and loses his job because of corporate downsizing. Because he needs to meet all of his self-inflicted financial obligations, he immediately goes out to find a job. He interviews with a place and, because he needs the money so bad (his severance money ran out quickly), he accepts a sub-par position paying less than what he made before. That doesn’t matter though because this is only temporary. He just needs a few paychecks to get back on his feet, then he’ll start his real job hunt. Now he’s working at a job that he doesn’t like, for less money, and still waiting to find some spare time so he can begin his job hunt. The car needed over $2,000 worth of repairs last week so he had to charge the entire amount to his credit card. Once he pays his debts off he’ll be able to justify working a little bit less so he can start his job hunt. Little does he know that his house needs a new roof…Steve’s response: “I’ve been dealt a bad hand. I can’t believe my luck.”

Scenario Two: Stan spends in February what he makes in January. He does not live paycheck to paycheck. Not only does he lag one month behind in his spending, he also has four months’ of expenses in a money-market account earning a paltry amount of interest. The account is easily accessible. He can have any money he needs from there simply by writing a check. Stan loses his job at the same company as Steve for the same reason. He begins looking for a new job full-time. He interviews at the same place Steve does and is even offered the same position as Steve but he turns it down. The pay wasn’t as good as his previous job, and he didn’t know if he’d like the work environment. He continues searching and finally, after two months, lands a job at his old company but in a different division. He’s now making five percent more at the same company that he loved working for anyway. Now he’s working on replenishing his emergency fund reserve. Two weeks later the car needs $2,000 of repairs. Stan can’t believe his luck, but he pays the $2,000. One week after that the roof starts leaking. Knowing that bad things come in threes, Stan pays for the new roof. His emergency fund is tapped quite a bit. At the moment he could maybe only go one month on the money he has left - but he made it - and he’s still debt free. Stan’s response: “My emergency fund took a hit, but I’m already rebuilding it. I’m glad it was there. I now have a better job, with better pay. All these things worked out for the best in the end.”

The fact of the matter is, when Mr. Murphy knows you have an emergency fund, it’s as if he just doesn’t want to mess with you. This is the strange phenomenon. Unexpected things happen to everyone, but not everyone classifies these things as emergencies. Why? Because they aren’t. Those who are prepared have their money in place. They’re ready for the unexpected and when it comes, they just roll with the punches, replenish their fund, and continue building their house of wealth, one brick at a time.