An emergency fund is something you don’t touch unless it’s an emergency. The thing is you have to define what situation will be an emergency.
Sometimes the family outside your household (even close friends) are in need (or want) of money, so do you deem that as an emergency? You have to weigh your pro’s and cons.
For me, I don’t touch my emergency fund, because I try to have extra money in my debit card for the “just in case” days when something odd comes up.
Related post: Do You Know Your Money Weakness?
THE SCENARIO
Once though I didn’t have money for “just in case” because we had just returned from a road trip and there was something wrong with our car when we returned. Husband didn’t want me to drive, except if it was within a five kilometers proximity of our home.
We didn’t have money to fix the car. Anyway, in the end, Husband’s instincts were correct – there was something wrong with the brake pads, according to a mechanic.
So while this was happening I was called for a second interview with a company I really wanted to work for. I was thinking “should I or shouldn’t I use money out of my emergency fund”?
It hurt, really it did because taking an Uber to this interview meant paying about R400 for the ride.
My heart was sore before the interview, but I decided to take the leap and take money out of my emergency fund. I didn’t want to experience “what if”. You know, having regrets of not doing something can haunt you.
I went to the interview, had a good time, but I wasn’t the candidate they wanted. Still, I don’t have regrets.
Related post: The Number One Reason We Don’t Pay Off Debt
DEFINE EMERGENCY
So what is deemed as an emergency?
It could be:
Your child or spouse gets sick or is in an accident and you need money for the doctor or hospital fees.
Medicine, in case you don’t have medical aid to cover this.
Your car breaks down or something needs to be fixed.
You need accommodation or you need money for a deposit on a new place to rent.
You get retrenched or unemployed suddenly…
Related post: Life Lessons Learned In April
Do you have an emergency fund? And what do you deem as an emergency?
Having emergency money is must! I don’t know how people live without one.
I always mean to start building an emergency fund…but too many emergencies prevent me from saving anything!
No..we do have recurring income which is a comfort but need to get on the ball with this.
I struggle with using my emergency fund, too! It was hard to save — I don’t want to have to save it up again!
having my emergency fund gives me peace of mind !!