Comments on: When To Use Your Emergency Fund http://masteryourcard.com/blog/2009/01/20/when-to-use-your-emergency-fund/ The best Credit Card Debt Blog online Thu, 02 Feb 2012 13:31:13 +1100 http://wordpress.org/?v=abc hourly 1 By: Melinda (Aussie-Girl) http://masteryourcard.com/blog/2009/01/20/when-to-use-your-emergency-fund/comment-page-1/#comment-17721 Melinda (Aussie-Girl) Fri, 06 Feb 2009 10:15:21 +0000 http://masteryourcard.com/blog/?p=706#comment-17721 We had quite a substantial emergency fund year before last (thanks to an inheritance) but it was depleted by $10,000 when we let my brother, sister in-law & little girl stay (nearly rent-free) in our old house whilst we paid for our new one. Now, I KNOW we did the right thing (nmany would disagree) and we have been reimbursed (not just fiscally) by God on any no. of occasions. Goal to reach AUS $20,000 by year's end. Already, this year we've had a few hiccups in which the emergency fund has taken a beating - but PRAISE GOD we have our health & happiness. We had quite a substantial emergency fund year before last (thanks to an inheritance) but it was depleted by $10,000 when we let my brother, sister in-law & little girl stay (nearly rent-free) in our old house whilst we paid for our new one.

Now, I KNOW we did the right thing (nmany would disagree) and we have been reimbursed (not just fiscally) by God on any no. of occasions.

Goal to reach AUS $20,000 by year’s end.
Already, this year we’ve had a few hiccups in which the emergency fund has taken a beating – but PRAISE GOD we have our health & happiness.

]]> By: Emergency Funds Make Your Life Better! (Or At Least More Stress Free) | Bible Money Matters http://masteryourcard.com/blog/2009/01/20/when-to-use-your-emergency-fund/comment-page-1/#comment-15338 Emergency Funds Make Your Life Better! (Or At Least More Stress Free) | Bible Money Matters Thu, 29 Jan 2009 16:20:36 +0000 http://masteryourcard.com/blog/?p=706#comment-15338 [...] When To Use Your Emergency Fund (for unexpected expenses of course!) [...] [...] When To Use Your Emergency Fund (for unexpected expenses of course!) [...]

]]> By: Kristy http://masteryourcard.com/blog/2009/01/20/when-to-use-your-emergency-fund/comment-page-1/#comment-15166 Kristy Thu, 29 Jan 2009 03:00:16 +0000 http://masteryourcard.com/blog/?p=706#comment-15166 @ threadbndr - That's an excellent way to break down your emergency fund, and if it works for you, then fantastic! I love it and I've been toying with the idea of doing that myself, currently I just throw all of that into one account, but I have 6 months expenses, plus the extra for that stuff. However, getting people to even start an emergency fund is a tough thing to do. People will give you all kinds of excuses why they can't save money. For those people, having three different buckets, as you say, may be more than they are willing to cope with. Keeping it simple is the best way to motivate those who've never saved before, at all. In regards to appliances breaking down, that really is a tricky subject. I see your point, and saving ahead of time is a fantastic idea. However, if the appliances are fairly new and something unexpected happens, that's an emergency. Of course, let me qualify that statement a little. The only appliance I would really consider an emergency if it broke down would be the refrigerator. Dishwashers are a convenience, not a necessity. Washers and dryers you can go without a little while and use the laundry mat. But, a refrigerator is a necessity, so to me, if that goes down, it's a legitimate reason to use the emergency fund. In an ideal world, we'd save separately for these types of things, but in reality, it doesn't happen that way. @ threadbndr – That’s an excellent way to break down your emergency fund, and if it works for you, then fantastic! I love it and I’ve been toying with the idea of doing that myself, currently I just throw all of that into one account, but I have 6 months expenses, plus the extra for that stuff. However, getting people to even start an emergency fund is a tough thing to do. People will give you all kinds of excuses why they can’t save money. For those people, having three different buckets, as you say, may be more than they are willing to cope with. Keeping it simple is the best way to motivate those who’ve never saved before, at all.

In regards to appliances breaking down, that really is a tricky subject. I see your point, and saving ahead of time is a fantastic idea. However, if the appliances are fairly new and something unexpected happens, that’s an emergency. Of course, let me qualify that statement a little. The only appliance I would really consider an emergency if it broke down would be the refrigerator. Dishwashers are a convenience, not a necessity. Washers and dryers you can go without a little while and use the laundry mat. But, a refrigerator is a necessity, so to me, if that goes down, it’s a legitimate reason to use the emergency fund. In an ideal world, we’d save separately for these types of things, but in reality, it doesn’t happen that way.

]]> By: threadbndr http://masteryourcard.com/blog/2009/01/20/when-to-use-your-emergency-fund/comment-page-1/#comment-15111 threadbndr Wed, 28 Jan 2009 22:43:47 +0000 http://masteryourcard.com/blog/?p=706#comment-15111 I'm with Sarah in Alaska. I think replacing appliances is something that isn't an emergency - a small escrow fund dedicated to household repairs and appliance replacement that is seperate from your main efund is the way to go. After all, you know that these issues are going to crop up - and it's just a matter of time. I actually subdivide my efund into three buckets - the car repair/replace escrow fund, the aforementioned house/appliance escrow fund, and the BIG efund - the OMG lost my job / need emergency surgery / have to fly across country to be with my wounded son..... (please G*d not that one...) Having different 'buckets' lets me budget better and I don't feel guilty raiding one of the escrow funds for their apointed purpose. I’m with Sarah in Alaska. I think replacing appliances is something that isn’t an emergency – a small escrow fund dedicated to household repairs and appliance replacement that is seperate from your main efund is the way to go. After all, you know that these issues are going to crop up – and it’s just a matter of time.

I actually subdivide my efund into three buckets – the car repair/replace escrow fund, the aforementioned house/appliance escrow fund, and the BIG efund – the OMG lost my job / need emergency surgery / have to fly across country to be with my wounded son….. (please G*d not that one…)

Having different ‘buckets’ lets me budget better and I don’t feel guilty raiding one of the escrow funds for their apointed purpose.

]]> By: Kristy http://masteryourcard.com/blog/2009/01/20/when-to-use-your-emergency-fund/comment-page-1/#comment-14853 Kristy Wed, 28 Jan 2009 01:20:11 +0000 http://masteryourcard.com/blog/?p=706#comment-14853 @ Sarah - In this case, the car was not broken down. She was simply considering using her emergency fund to pay it off. In regards to your question, yes sometimes you can anticipate needing new things around the house, but sometimes not. My parents had a three year old refrigerator go out due to a malfunctioning coil. That wasn't something they anticipated. Had the refrigerator not been under warranty, that would have been an emergency. Now, if your car breaks down and you need immediate repairs in order to get to work, sure, use your emergency fund. But that wasn't the case here, it's a completely different situation. Again, if it can be anticipated, it is not an emergency and can be saved for. If it's unexpected and needs immediate attention, that constitutes and emergency. Obviously people will use their funds as they see fit, I'm just explaining when what an emergency fund is supposed to be for. @ Sarah – In this case, the car was not broken down. She was simply considering using her emergency fund to pay it off. In regards to your question, yes sometimes you can anticipate needing new things around the house, but sometimes not. My parents had a three year old refrigerator go out due to a malfunctioning coil. That wasn’t something they anticipated. Had the refrigerator not been under warranty, that would have been an emergency. Now, if your car breaks down and you need immediate repairs in order to get to work, sure, use your emergency fund. But that wasn’t the case here, it’s a completely different situation. Again, if it can be anticipated, it is not an emergency and can be saved for. If it’s unexpected and needs immediate attention, that constitutes and emergency.

Obviously people will use their funds as they see fit, I’m just explaining when what an emergency fund is supposed to be for.

]]> By: Sarah in Alaska http://masteryourcard.com/blog/2009/01/20/when-to-use-your-emergency-fund/comment-page-1/#comment-14847 Sarah in Alaska Wed, 28 Jan 2009 00:36:32 +0000 http://masteryourcard.com/blog/?p=706#comment-14847 Why does a broken fridge constitute using emergency funds, but a car does not? Especially, if said car has broken down. I'd say you can anticipate needing a new refrigerator, heater, roof, etc. the same way you anticipate a new car. Is there some flawed logic there? Why does a broken fridge constitute using emergency funds, but a car does not? Especially, if said car has broken down. I’d say you can anticipate needing a new refrigerator, heater, roof, etc. the same way you anticipate a new car. Is there some flawed logic there?

]]> By: Jennifer @ Frugal Front Porch http://masteryourcard.com/blog/2009/01/20/when-to-use-your-emergency-fund/comment-page-1/#comment-14739 Jennifer @ Frugal Front Porch Tue, 27 Jan 2009 14:57:12 +0000 http://masteryourcard.com/blog/?p=706#comment-14739 Kristy-I agree with you on this. I can't see using an ER fund to pay off anything as long as it's still within my monthly budget. If it's not within my monthly budget then I'd look at ways to live within my means before using any savings or an ER fund. If that means taking the bus more, scaling back the cable package, cutting my cell phone plan, etc. then that's probably the wisest course of action. I think she made the right choice by asking for an unbiased opinion and then following her original instincts. Great article! Kristy-I agree with you on this. I can’t see using an ER fund to pay off anything as long as it’s still within my monthly budget. If it’s not within my monthly budget then I’d look at ways to live within my means before using any savings or an ER fund. If that means taking the bus more, scaling back the cable package, cutting my cell phone plan, etc. then that’s probably the wisest course of action. I think she made the right choice by asking for an unbiased opinion and then following her original instincts. Great article!

]]> By: Festival of Frugality - 162nd Edition http://masteryourcard.com/blog/2009/01/20/when-to-use-your-emergency-fund/comment-page-1/#comment-14706 Festival of Frugality - 162nd Edition Tue, 27 Jan 2009 12:00:51 +0000 http://masteryourcard.com/blog/?p=706#comment-14706 [...] When To Use Your Emergency Fund posted at Master Your Card. [...] [...] When To Use Your Emergency Fund posted at Master Your Card. [...]

]]> By: Slinky http://masteryourcard.com/blog/2009/01/20/when-to-use-your-emergency-fund/comment-page-1/#comment-13830 Slinky Thu, 22 Jan 2009 22:38:50 +0000 http://masteryourcard.com/blog/?p=706#comment-13830 Most recently, I used it for part of a down payment on a car. I graduated from college (last May, hurrah!) and two weeks later (before I even got my first paycheck), my car dies. Ok, I could have fixed the water pump, but the car was 17 years old and had more problems than I have fingers and toes. Anyway, so I spent three months without a car, saving everything I could, drained my eFund down to $150 dollars, and bought a new car. I've since built the eFund back up and then some. I plan to keep going on that until I get 3-4 months basic expenses and then start paying extra on the car. In general, if taking money from your eFund makes you think, "Oh man, I REALLY wish I didn't have to take money out for this," it's probably an emergency. If you're thinking, "I'll just pay that back next month," probably not so much. :) Most recently, I used it for part of a down payment on a car. I graduated from college (last May, hurrah!) and two weeks later (before I even got my first paycheck), my car dies. Ok, I could have fixed the water pump, but the car was 17 years old and had more problems than I have fingers and toes. Anyway, so I spent three months without a car, saving everything I could, drained my eFund down to $150 dollars, and bought a new car. I’ve since built the eFund back up and then some. I plan to keep going on that until I get 3-4 months basic expenses and then start paying extra on the car.

In general, if taking money from your eFund makes you think, “Oh man, I REALLY wish I didn’t have to take money out for this,” it’s probably an emergency. If you’re thinking, “I’ll just pay that back next month,” probably not so much. :)

]]> By: J. Money http://masteryourcard.com/blog/2009/01/20/when-to-use-your-emergency-fund/comment-page-1/#comment-13659 J. Money Wed, 21 Jan 2009 22:28:18 +0000 http://masteryourcard.com/blog/?p=706#comment-13659 We use our Emergency Fund the same way you do Kristy :) I like to think of it as a "flat tire scenario" - something you can't plan for. You're driving down the street all willy nilly blaring some hip hop and then BAM - your tire pops! aka emergency. I actually heard once of someone <a href="http://www.budgetsaresexy.com/2008/09/using-your-401k-as-emergency-fund-are.html" rel="nofollow">using their 401k as their emergency fund</a>! WTF? We use our Emergency Fund the same way you do Kristy :) I like to think of it as a “flat tire scenario” – something you can’t plan for. You’re driving down the street all willy nilly blaring some hip hop and then BAM – your tire pops! aka emergency.

I actually heard once of someone using their 401k as their emergency fund! WTF?

]]>