When do you use your emergency fund?

by Erika Torres

Well, the shit has finally hit the fan.

I was doing fine but I am now really feeling the effects of Eric being out of work and not receiving any paychecks for approximately five whole weeks.

Even though he’s been back at work for two weeks, he has yet o receive a paycheck and I’m feeling it. A LOT.

The Bills

I thought we got lucky and got away with a $150 emergency room bill. If only.

In the past few weeks, we have received bills from all over the place: the emergency room itself ($567), the emergency room doctor –because apparently they have their own rates separate from the hospital???–, the sports specialist Eric saw after he got injured, and some other bills I can’t even remember who they came from.

In all, I think we paid about $700 in bills in addition to the original $150 we paid. So $850. And that’s WITH insurance.

Um yeah, Eric is never playing soccer again.

In addition to this $850 in medical crap, there are also some other purchases that needed to be made,  such as a $250 registration fee for Cal State Fullerton for Eric to finish up some classes. All in all, we are about $2,000 in the hole right now.

And yes, it’s all on a credit card that is not due until June 8th. Before you begin stoning me, let me say that we have the money to pay it off…in our emergency fund.

Why I hate touching our Emergency Fund

I hate touching our emergency fund–and while perhaps not all of the purchases on our credit card qualify as an emergency, I definitely think the medical bills do.

Still–I hate touching the emergency fund. It’s just too easy to go in there, take the money, and then have to start saving up again. I feel that we should suffer first and try to pay off as much as possible without going into the emergency fund.

Perhaps my problem is that our emergency fund is really more of a down payment fund. And when I touch the emergency fund, I feel like I’m taking away from our savings for a down payment.

Fixing the problem

I think to remedy this, I am going to have to distinguish the savings accounts and label one “Emergency Fund” and the other one “Down Payment” so that I can see them as two separate entities. Just like I don’t consider my Side Hustle income any part of our savings, but rather Travel money.

Any way you slice it, financial setbacks suck. Just because we have the money, doesn’t make it any easier to pay. I still hate seeing our hard earned money disappear, knowing that it could go to better things, like a down payment fund, debt repayment, or you know, that honeymoon that will happen one day….

The next few months

I think we’re extremely lucky that May is a three-paycheck month for me, so my next paycheck–which I had planned to go straight to savings–will now go to paying off this debt. It sucks–no doubt about it, but I hope to get back on the financial track by next month.

What type of emergency justifies dipping into your emergency fund?

 image via


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J.Mill May 16, 2012 - 2:40 pm

Thank God you have the money! Medical debt is scary! I have a good girlfriend who has no health insurance and is pregnant with her second child. I know that the state takes care of you and your baby in the short term, but long term healthcare is the goal. Healthcare and doctors are so expensive. It’s a wonder that anyone an afford insurance or a doctor’s visit with or without insurance!

I would say that dipping into the insurance fund for medical reasons is totally ok. I would also agree with you that Eric should never play a contact sport again! Haha… but seriously…. 🙂

Diana May 16, 2012 - 12:45 pm

You may want to double check that those other bills were actually submitted to your insurance company. Many times they are not. Also, if you haven’t paid them yet, you can usually negotiate the cost of the bill with the company.

Megan @ The Finance Geek May 16, 2012 - 12:26 pm

I hate, hate, hate spending money from savings,especially from our emergency fund. I love having an emergency fund for the piece of mind, but spending it hurts. I recognize that the point of savings is so you have money when you need it (or wantit, depending on your goal), but I hate seeing my accounts looking so much skimpier after.

I definitely recommend the “separate account” approach for the emergency fund. It makes it much easier to be able to set a line below which the emergency fund account cannot fall. I’ve been guilty of having too many savings accounts (ING Direct is so awesome), but I would never have less than two, even if they were just labled “Emergency” and “General.”

Elizabeth @ Broke Professionals May 16, 2012 - 11:41 am

So funny, I just wrote a similar post…

If it’s an “emergency” over about $100, then I do dip into the emergency fund and pay myself back as I am able – it beats using a credit card! For smaller emergencies, I simply make adjustments to my monthly budget to accommodate.

Oh, and just WAIT until you have a baby… your OB, the anesthesiologist, the neonatalogist, the hospital – they ALL bill you separately!

Eve May 15, 2012 - 7:49 pm

Oh, I hear you on not wanting to touch the Emergency Fund. Frankly I don’t consider medical stuff “emergencies”, even if it involves a trip to the ER. That said, I like the other posters’ suggestions to create Emergency Funds separate from Down Payment Funds. We had a medical bill of mine for over a year (that we arranged to make payments on); it was a gallbladder removal. It wasn’t an emergency–I just hadn’t realized there would be so *many* other bills related to it. Sigh.
My mom is in Hospice, and even though I am expecting that Call any day now, that still doesn’t justify removing money from our Emergency Fund. I will definitely use the credit cards to finance that trip (she lives 8 hours away) and the associated costs of moving her stuff back to where I live. I’m the Executor, so maybe that makes it an easier decision. I am also losing my job due to the business closing, so I feel *much* better knowing that EF is there in case of any emergency involving *our* own living expenses…
Really good topic!

Tanner May 15, 2012 - 6:16 pm

Thus far, my emergencies have not really been emergencies at all… mostly my parents’. Ideally, I would want to keep two separate funds; an EF and a Murphy fund that would cover for a lot of these smaller incidentals. But EF should be touched when emergencies can’t be avoided or rearranged so you can pay them timely (could you make payment plans to pay that medical debt?).

Jai Catalano May 15, 2012 - 1:59 pm

I can hear your anger. It almost sounds like it is trickling into other areas through what I am reading. Thankfully Eric is ok even though he won’t play soccer. An emergency fund is for emergencies and this seems like an emergency. The money has to come from somewhere. Also in the end of the day it’s debt… I know… IT SUCKS!!! but you will get past this. Eric will get paid and you have a 3 week pay month. I would say those are the lights at the end of the tunnel.

Lena at frugalandthankful May 15, 2012 - 11:56 am

To me unplanned medical bills are always an emergency. But if it’s something we know should happen (aka new tires that we needed for a while, car registration etc) we try to plan and save for it. I’m actually thinking of creating a separate account just for car expenses.

DCSquared May 15, 2012 - 10:51 am

We haven’t had to touch our emergency fund yet. But I have no idea when or what would cause us to. I would HATE to do it. I would rather put on CC and pay it off the next month too!

We also have a Down payment savings…and I’m thinking I may need to separate too! Hmmmmmmmmmmm…Good thoughts!!

Young Professional Finances May 15, 2012 - 10:42 am

I haven’t had to touch my emergency fund yet (knock on wood) but things like an emergency room visit would definitely count. Of course, if I could pay it off without touching the account, I would but otherwise, that’s what it’s there for. I’d really like to save it for a REAL emergency like if I lose my job (again knock on wood) and need to survive for a few months.

Jordann @ My Alternate Life May 15, 2012 - 9:28 am

I use my emergency fund for any unexpected expense that I don’t have immediate cash on hand for, or that would take more than a month to pay off the credit card. I hate using my emergency fund but have so far used it twice:
1) My car needed a new battery.
2) An unexpected bill from the Canada Revenue Agency.
In both cases I was able to replenish the fund in a month, so it worked out.

Paul @ The Frugal Toad May 15, 2012 - 6:24 am

We tend to use the emergency fund for things like major auto repairs or emergency home repairs. Everything else we either pay cash for or budget for and buy when we have the cash.

KendraD May 15, 2012 - 4:35 am

I would definitely separate your emergency fund and your down payment fund, because really they should be separate. Buying a house is not an emergency situation, but there could potentially be a lot of emergency situations involved in buying a house.

For example, some friends of ours bought a house, it passed the inspection, everything and then less than 3 months later they were told their house couldn’t be insured if they didn’t replace the roof in full.

I know it can be hard to build up a large sum of money and not want to continue building it for other purposes, but an emergency fund should be saved for situations exactly like the medical situation your husband was involved in.

Also, did he not pay for insurance with his soccer team? When my husband was playing team sports, they had to have insurance coverage to even go out on the field/court and the team was responsible if anyone was hurt while playing.

my honest answer May 15, 2012 - 12:59 am

I would stay away from the emergency fund unless you can’t make the credit card payment in full. At that point I would definitely dip into it because you don’t want to start paying interest.

I think you’ve got the right balance though – make sure you feel some pain! Because that will remind you to keep a careful eye on your finances overall.

Good luck, and I hope Eric’s all better soon!

Kris @ BalancingMoneyandLife May 14, 2012 - 9:59 pm

I would definitely consider the medical bills an emergency. I understand what you mean about not wanting to touch it though. Hope that third paycheque covers most of it for you!

Brent Pittman May 14, 2012 - 8:46 pm

I quit my old job and lived off emergency fund for several months until income picked back up. If we did have the fund, I’d still be stuck there.

Jessica @ Budget For Health May 14, 2012 - 7:39 pm

I feel like I’ve read 3 or 4 posts this week about people having to dip into their emergency fund. Praise God you have one even though it sucks having to use it. We’re just about to top ours off next month. I’m glad it will make emergencies slightly less terrible. Our friends’ 4-year old son broke his femur straight through on one of those mall play areas and they definitely had to dip into the EF Easter weekend!

Teacher Girl May 14, 2012 - 6:27 pm

I am glad you have the money to cover it. I know that it sucks to touch that money, but just imagine if it weren’t there. *hugs*

Daisy May 14, 2012 - 6:03 pm

Me and J are the exact same – we have an EF but it’s more like a down payment fund. We’ll gladly drain it when we buy a house but for now, it stays as an EF just in case. I don’t know what would constitute as an emergency for us- not medical stuff because we don’t really have to pay for that, but probably if a car broke down since we live far away from where we work. Or, vet bills – our dog is definitely a priority and if she got hurt we may have to dip into it.

Adrienne May 14, 2012 - 4:35 pm

I understand completely. I feel exactly the same!

I’m so sorry about all these crappy emergency room costs 🙁

Mrs. Williams May 14, 2012 - 4:32 pm

I never know when to dip into ours either. I’ll use a credit card before I’ll touch savings too. My husband was in the hospital for a couple days two years ago & after insurance I think we owed around $1000. I called & set up a pymt plan with them. While it sucked to have the monthly pymt for awhile, it was interest free & kept our savings in tact. Something to think about if he happens to play soccer again 😉

Frugal Portland May 14, 2012 - 4:23 pm

I was worried when you mentioned that you only had the $150 bill that you’d only gotten the first of however many. I think you should be proud of yourself for having an emergency fund at all. That is what they are for, emergencies. At least you don’t have to go into credit card debt. My definition of an emergency is simply the spending that exceeds my income on any given month.

Cindy CF May 14, 2012 - 4:13 pm

I hear ya. I recently had a planned car expense (registration and brakes) and depleted the “car maintenance” fund that I was so proud of actually adding to monthly instead of just trying to pull car maintenance out of a single paycheck when the time came. Two days later I needed 4 new tires. Ugh. There goes a chunk of the emergency fund.

I hated seeing the balance drop so quickly when it took so long to get there. But when I was done griping, I was just glad that I had it to take from, and didn’t have to contemplate opening a tire store credit account, which really would have been awful.

CeCe @Frugalista Married May 14, 2012 - 3:28 pm

This is a really good question. I HATE touching my savings that is just there for emergency or whatever. I like knowing it’s there but also it is there for a reason right? I’d probably do what I could to pay down the debt off the card with your paycheck and then even let the balance roll over one more time if you are willing to suck up the interest. Or even balance transfer it to a different card. And then you won’t have to touch the fund. Or you could just bite the bullet and use it. It’s a tough question but it’s definitely good that you have a fund and so are even in a position to contemplate using it. Also, that’s the good thing about not being in a bunch of credit card debt. You can literally have that one balance on it that happened in an emergency and pay it off.


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