How Much Emergency Fund Spending Is Allowed?

Have you ever had to spend your emergency fund money? We’re going to look at how much emergency fund spending is acceptable and what to do when you have to dip into your emergency fund.

The reality is the many of us make an emergency fund to have money for a rainy day, but we really don’t want to access this money. We don’t want to have to dip into our savings.

However, life will have other plans for us. We may have to use that emergency fund when life happens.

emergency fund how much

The other week I wrote an article about emergency funds for young people which got a lot of great responses and once again spun off into another interesting debate. While we know it’s important to save for an emergency, it’s a bit challenging to determine what qualifies as an emergency.

Here are some common questions about emergency funds:

  • Can I use my emergency fund for a vacation?
  • Can I cover my bills with my emergency fund?
  • Does it matter where I keep my emergency fund money?

We’re going to dive into emergency fund spending today.

How do you spend your emergency fund money?

The question that I now find myself curious to have answered by everyone is how do you spend your emergency fund money?

No it’s not an oxymoron or grammatical error, I’m curious to read how the readers have spent their emergency fund money in the past or how do you plan on spending your emergency fund money.

Stephanie of Poorer Than You wrote that she is more focused on her “getting established” fund which she will use towards getting her career and life off the ground. From paying for interview suits to covering moving expenses. Frank stated that he has an emergency fund of $10,000 which equals 8 months of living expenses. This interesting conversation has sparked the following questions:

When do you dip into your emergency fund?

I believe that you should only access this fund if you had something that qualifies as a true emergency.

Here are some common examples of emergency fund spending:

  • You had a car accident.
  • You lost your job.
  • You had an unexpected expense come out of nowhere.

Here are examples of things that don’t qualify as an emergency:

  • You want a new phone.
  • You want to go on vacation.
  • There’s a sale.
  • An investment opportunity.

Trust me, I know how tempting it is to put your savings into a vacation or every new investment opportunity. You have to fight the urge. You have to do whatever you can to not touch this money until you absolutely have to deal with an emergency. You want this money as a backup plan.

What happens when you use your emergency fund?

The goal should be to replenish your emergency fund spending as quickly as possible. This won’t always be easy with life getting in the way, but you get the point. You eventually are going to be able to hopefully land back on your feet. You should make your goal to replenish this fund.

How have you spent your emergency fund money in the past?

Life happens. Nobody expects to get into an accident, to lose a job, or to go through a stressful situation.

What do you constitute as a good reason for spending your emergency fund money?

Is there anything specific than you plan on using your emergency fund money for?

I’ve personally touched my emergency fund money a few times. I had a car accident once, I lost a freelancing gig, and I’ve had some unexpected scenarios pop up.

In order for a situation to be considered an “emergency” for me I would have to be recently laid off and in the process of finding a new job, during which time the emergency fund money could help me get by.

How do you justify your emergency fund spending?

5 thoughts on “How Much Emergency Fund Spending Is Allowed?”

  1. While in college, the only things I’ve touched my E-fund for have been unexpected car repairs. Yes, I know I should have a separate “car maintenance fund,” but I don’t. Yet. These next few months, immediately after college, I may have to dip into it if my getting-established fund is not enough.

  2. I have only touched my emergency fund for one thing. I broke my glasses and needed replacements. Coincidentally I also had to have a new exam. Since I was using my emergency fund anyway, I decided to take this opportunity to get contacts. I bought a whole year of contacts and some cheap glasses for when I was feeling lazy. Thankfully, I’ve already replaced the funds I used.

  3. I don’t have an emergency fund per se – I call it my “fun money”. It’s for:
    i. Unexpected present-buying
    ii. Unusually large one-off expenses (e.g. Buying a £60 ticket to see a musical)
    iii. Saving up for a big treat for myself.

    I want to go to Mexico this summer. I need between £800 and £1000. But I’m not sure whether to touch my fun money. I was planning on buying a new computer. Even if I used it all, I’d still be a couple of hundred short. So I’d need to dip into my proper savings account (affectionately known as the “house deposit fund”).

    I never realised before this that I have a huge psychological barrier when it comes to spending money I’ve saved. Once it’s socked away in a savings account, I just don’t want to take it out, even when I’d be spending it on exactly what I saved it for (i.e. having one-off expensive fun!).

  4. I spent it on my honeymoon cruise.

    Okay- that sounds terrible. It’s partially true. I had money in my IRA that could potentially act as an e-fund while I tried to get married. Buying a ring, paying for a honeymoon, and furnishing an apartment is expensive.

    We quickly repented and have a fully-funded efund for 6 months of living expenses.

  5. We’ve been lucky enough to not have to touch our emergency fund for quite some time. The most recent time was to pay our architect for our house plans. If things continue, we should be able to reimburse the emergency fund with a little more on top.

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