Keep your emergency funds to emergencies

Fresh brains emergencyThis post over at Money Talks discusses what an emergency is, specifically as it pertains to when to dip into your emergency fund.

The examples that she brings up are (a) job loss and (b) medical emergency.  These are valid emergencies to me as well.  They’re the very reason that one sets up an emergency fund.

Some expenses that don’t qualify as being emergencies:

  • Vacation.  These should be planned for and budgeted for separately.
  • Regular home maintenance.  Maintaining a home requires regular budgeting for lawn care, gutter cleaning, painting, HVAC maintenance, etc.
  • Insurance and other periodic payments.  These can be amortized over each month.  They’re not a surprise.
  • Vehicle repair and replacement.  Cars don’t last forever.  Their replacement can be planned for.
  • Christmas.  Gift giving can be planned for and budgeted for.

Keep your emergency fund only for emergencies, and it will be there when you have a real need for it.

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