So You Have an Emergency Fund
Good for you for putting money aside for emergencies. A lot of people live paycheck to paycheck and you’re one of the lucky ones who figured out how to break the cycle. It says a lot about you that you had the drive to put all of this hard earned money aside and I bet it wasn’t an easy task. Whether your emergency fund is $1,000, two months worth of expenses or a year worth of expenses you did a good job to get started or to have a fully funded fund.
An Emergency Pops Up
You need to figure out is this really an emergency. Finding a great deal on that car you always wanted is not an emergency. Neither is getting the new Apple MacBook Pro even though you really, really want it. If it is unexpected and health related chances are it is an emergency although getting braces probably isn’t. Losing your job when you were the only one bringing in money is definitely an emergency. Just be honest with yourself.
If it is really an emergency and you don’t have any other options beside going into debt USE YOUR EMERGENCY FUND MONEY!!! I recently have read about people who run into a financial emergency and don’t want to spend their emergency fund that took so long to fill. Instead they decide to go back into debt and pay interest which really isn’t optimal.
You built your fund for a reason and that was so you wouldn’t have to go into debt if an emergency came up. Well… it happened and you were prepared. Don’t feel bad! It might take you a while to build it back up but it won’t be nearly as long as it would be to pay off a high interest rate credit card.
If you do have some money elsewhere that you can use I would definitely suggest you use that first. I’m not saying to break into your retirement account because you shouldn’t. However, a vacation fund would be a possibility. It wouldn’t be fun but you would still have your emergency fund intact.
You Must Remember That Something Worse Could Happen Tomorrow
If you had a minor medical emergency there isn’t anything that says a major medical emergency isn’t right around the corner. You could lose your job next month if the economy tanks again like in 2008. We can’t predict the future. If something like this happens you’ll be glad you skipped out on your vacation and still have that emergency fund.
In the end it is a judgment call. Only you can determine whether or not to break into the emergency fund. Just remember why you saved it up in the first place and use it accordingly. Don’t feel guilty if you really truly have to break into it for an emergency.
Have you ever had to dip into your emergency fund? Why dip into it and how long did it take to fill it back up?