Should I use the emergency fund?

Take money out of the emergency fund or rework the budget? What would you do?

I got a great question from Eileen about using the emergency fund versus trying to cash flow an emergency.

Do you ever find yourself reluctant to let go of the savings you have available because you’d like to see that number grow (maybe as much as you want to see others go down)? For instance….in the months that we have an unexpected expense, I tend to just try to absorb the extra expenses without hitting our emergency fund (or other cash funds) I try to cut back the existing budget and most of the times I know when it makes sense to do that vs pulling out some saving, but other times I end up cutting it close on fixed expenses and then I end up moving money out of the emergency savings anyway. I’m not sure if I’m making sense…but it’s like this fixation of NOT touching an emergency fund (or our “household” acct — for minor but not typical expenses). I’m not sure what is better from a mental standpoint.

I hate touching my emergency fund, too!

We always try to cash flow emergencies out of our budget when we can. The way I see it, if I take the money out of the emergency fund, I will need to make refilling the fund my top priority next month. That means that I will need to cut back on my debt snowball next month to put the money back into savings.

For me, taking money out of  savings is a mental trigger. It causes me to worry a bit to tap into that account. It’s my financial security blanket. I like having that money there just in case. I also worry that if I get in the habit of touching the account, one of these days, I might touch it for something that really isn’t an emergency.

We were forced to use our emergency fund this summer when one of our cats got sick. It was the end of the budget cycle and I just did not have the funds to reallocate to the emergency. It gave me such peace of mind to know it was there so we could deal with the stress of losing one of our cats without having the financial stress as well. The first thing I did in the next budget was replace the funds in savings.

Honestly, there is no right or wrong answer to your question. The thing I love is that you are being intentional with your money. You are evaluating what is and is not an emergency and you are trying to absorb the cost before touching your savings. Eileen, you are doing an awesome job!

What advice would you give Eileen? How do you feel about touching your emergency fund?

Please note: I reserve the right to delete comments that are offensive or off-topic.