Having an emergency fund gives me a sense of security. I know many financial experts recommend a 6 to 9 month emergency fund. Our $5,000 rainy-day fund certainly wouldn't cover our expenses for six months if we fell on hard times. However, I hope to continue to build our emergency fund $100 at a time. By keeping our hands off our emergency fund, we are more likely to have money there when we need it the most. Not everything we want to spend money on qualifies as an emergency.
I won't use money from our emergency fund to pay for college classes for our children or ourselves. I believe education is a priority, but it doesn't qualify as an emergency. When my younger son needed to pay for his college books, I directed him to his checking account. He had saved money after participating in a paid acne study. Leaving our family's emergency fund untouched will benefit my son by protecting him in a case of a real financial emergency.
Flying to events
Without a doubt, I have relatives who don't think twice about using credit cards to pay for plane tickets to attend funerals or weddings. Because they are major life events, weddings and funerals sound important enough to justify tapping emergency funds. I've skipped more weddings and funerals than I'd like to admit simply because I didn't have the money. After I finish saving for a fully-funded emergency fund, I intend to put aside money for travel and important events, but in the meantime, I'll have to drive to events that I can afford.
Bailing out friends
No one likes to feel like a selfish person. At the same time, I can't help but think about the cliché that you can't help another person until you put on your own breathing mask. I feel as though my first financial responsibility is to my immediate family. I don't mind giving friends or relatives small financial gifts when I can afford to do so. However, most friends can access emergency credit. It's not fun to go into debt, but it's better to take financial responsibility rather than asking friends for loans or gifts.
Renovating the house
When our appliances break, I use money in our budget for repairs. However, I don't typically have enough money to buy new appliances. I dipped into our emergency fund to buy a new refrigerator and dishwasher when they broke. However, I won't use our emergency fund to pay for paint, curtains, new floors, granite countertops or other cosmetic improvements. Unless the roof is caving in, it's not urgent.
I'm not sure when we will reach our goal of having a 6 month emergency fund, but I know we will reach our goal sooner if we stop spending the money on unexpected expenses that are not critical. For us, an emergency has to be a medical issue, job loss or major catastrophic event. Unfortunately, that new designer handbag I spotted the other day, simply doesn't qualify.
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