Could you come up with an extra $500 in an emergency? What about $5000? The statistics about Americans’ inability to cover emergency expenses are sobering, so it’s not surprising that posts calling for emergency funds are everywhere. Peace of mind for the win. And with all the emergency fund hoopla, there’s even been some debate about how much is too much for an emergency fund.
While the Internet’s pretty much got the what and why covered, but what about the when of emergency funds? To be honest, I hadn’t given it much thought beyond to say in an emergency, duh. But when people started suggesting that we use our e-fund to float my upcoming maternity leave, I realized I actually have some pretty strong feelings about when I will—and won’t!—dip into that account. Here’s my take on when to spend your emergency fund.
Get a Plan
I’m not sure if this saying is popular in the regular world, but in teacher world, it is an absolute mantra. Poor planning on your part does not constitute an emergency on mine. Hello, missing homework. The adage also holds true with emergency funds. Or at least it should.
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You drive a car? Awesome. Me too. You live in a house? Twinning! Basically, if you are the responsible party for any big ticket item, I can pretty much guarantee one thing: it won’t last forever. In fact, there are certain things that you can pretty well time. That oil change? Every three to six months, baby. New tires? Five or ten years if you’re lucky. Replace your roof, reside your house, install new windows. Count on it within a decade or two of home ownership.
Those are not emergencies. They are expenses. While they may be much less infrequent than, say, shopping for groceries, think of them as the beaucoup bucks version of the spices you only buy once every three
months years. You might be willing or able to stretch the shelf life of these things more than many people (hat tip to you, Sir, with your iron stomach and nerves of steel), but the expenses are inevitable. If you think poor planning is a solid justification of when to spend your emergency fund, think again.
Now that we know what an emergency isn’t, let’s talk about what it is. An emergency is serious, and it’s unexpected. The nitty gritty details will shake out differently for everyone, the foundation is the same. If it doesn’t meet both of those criteria, it’s not an emergency.
Let’s take Half Penny, for instance. The birth of our child is, in fact, serious. It’s the most serious, seriously terrifying, and seriously exciting thing I’ve ever done. But it’s not unexpected. And even if it was, we’ve already had 6 months to
countdown plan accordingly.
If there’s an unforeseen medical issue, that’s an emergency. If your shed blows down and the shingles blow off part of your house in a storm, that’s an emergency. If you lose your job out of the blue, that’s an emergency. Otherwise, put the emergency fund money down.
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And if you disagree with my take on what an emergency is, I forgive you. In fact, the more scenarios you can run through that help you solidify what an emergency is and isn’t in your world, the better. Once you’ve got a solid definition of an emergency, it’ll become much clearer when to spend your emergency fund.
Check for Alternatives
But wait. There’s a catch. I know, I know. This section is like the guy at the end of the advertisement that talks really fast but is also totally worth listening to because he’ll talk you out of actually buying whatever they’re selling.
You know what an emergency is not. You know what an emergency is. But you also need to make sure that there is no other way you could float the expense before you dip into your e-fund. No, I’m not talking about debt. But if you have some spending money left in your budget that you haven’t touched or you are paid for a side hustle this month, you might consider using some of that to cover the expense or to replenish your emergency fund.
Why? Because emergencies are unexpected. And you already told me that you’re twinning with me because we both own cars and we both own houses. Well, buckle up, because last year, we kicked things off with a hit-and-run accident, a dead furnace, and a windstorm that took our shed and part of our roof to Kansas with Toto. But if you’ve already thought long and hard about when to spend your emergency fund, you can take those disasters in stride just like I did. Which means you’ll broadcast a four-alarm fire on Twitter, and you’ll cover your bills just fine.
So Tell Me…When do you or when don’t you tap into your emergency fund?