Using your emergency fund

iVillage Member
Registered: 09-22-1999
Using your emergency fund
12
Sun, 01-09-2005 - 9:02pm

Many of us have just begun to save in earnest in our emergency funds. Hopefully we will not have to withdraw from them anytime soon, but IF you had to withdraw from it in the future, what 3 types of spending events would you consider an emergency that you would use your fund for?

For example:
Auto repairs?
Overdue Rent/Mortgage?
Medical copay?
Preventing an overdraft?
Home repair?
Emergency trip?

Do you have a separate emegency fund for any special purpose?

Looking forward to your answers, Littlesbigs

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iVillage Member
Registered: 04-22-2003
Sun, 01-09-2005 - 9:43pm

I would use my savings for auto repairs, a medical emergency, and probably an emergency trip.

slojuly

iVillage Member
Registered: 09-21-2004
Sun, 01-09-2005 - 10:58pm
Well since I am trying to get out of debt (which could be really feasible to be debt free in one year) I am only working on one saving account. I would say emergency would constitute auto repairs, an emergency trip (which constitutes serious injury or death) and I think that's about it. I live in an apartment so I don't have to worry about repairs, my rent is paid on the first all the time since dh gets paid on the first. Its also a priority. I am in charge of our finances and I have never in my life bounced a check or overdrawn in any way. I'm very anal about the money lol.
iVillage Member
Registered: 09-25-2003
Mon, 01-10-2005 - 2:30am

I'm not sure, since we are just starting our emergency fund. We are having difficulty deciding what would count as an emergency. I think it would come down to:

emergency trip (this has happened - his dad ended up in the hospital during a business trip, and we had to head over there to get him and bring him back)
or
medical (we don't have insurance, other than the basic provincial plan, but he needs medicine - we'll both be covered under his by the end of the year)

so long as his payroll doesn't get messed up again, we won't have any problems with rent/overdraft - he's really careful about that.

iVillage Member
Registered: 11-13-2004
Mon, 01-10-2005 - 2:50am
There are very few things that I would classify as an emergency. I have learned to live without so many things, when I was living paycheck to paycheck. I think I have a pretty decent emergency fund built up; took me a little over a year to save, I have about $7500; so I am learning to be cautious about taking it out for anything. I would definately say car repairs would be an emergency and anything that I do not normally budget for that would come up; new furnice, water heater; home repairs etc. Also anything extra that may come up for my two kids. I am a single mother so I have learned to be prepared for just about anything. I do have medical insurance, but would take money out of savings for copays; medications, stuff like that. Also school related things for the kids. Child support only goes so far. Most of my family is close by so a trip is unlikely. I would like to start savings accounts for both my kids for things like school expenses, scouts, etc, but right now everything is in one account; for now it works out fine. Hope everyone's new year is plentiful!
iVillage Member
Registered: 04-22-2003
Mon, 01-10-2005 - 7:49am

Wow! You have a great savings! DId you save a certain amt every month or did you also snowflake?

cheers,
slojuly

Avatar for sohappilyme
iVillage Member
Registered: 03-26-2003
Mon, 01-10-2005 - 7:52am

It's hard for me to answer this.

Sarah
iVillage Member
Registered: 03-28-2003
Mon, 01-10-2005 - 11:56am
I would use my emergency fund for car repairs, medical bills, emergency trips, or even preventing an overdraft (which should never happen, but I would borrow money from myself rather than taking a $29 fee that the bank would charge.) Basically, anything necessary that we did not have prior notice of. Shopping? Nope. Ordering pizza? (I'm dying for pizza..can you tell?) Nope. Overdue rent? Has never happened yet, so nope!!! There's absolutely no point to having an emergency fund if you don't allow yourself to use it!!!
iVillage Member
Registered: 02-19-2004
Mon, 01-10-2005 - 12:39pm

I just used it this weekend (well, a really big portion of it). I had to make a down payment on my car. I wanted to put enough down so that my payment would be affordable. So now I am back to having a small emergency savings balance (just under $500) and I owe $2,000 more on my credit card (I put $3,000 down on the car). I will pay the credit card off by March/April. That money would have gone toward my other credit card debt, but it is sitting at zero percent interest so it can wait (and I believe I may still be able to pay the 0% card off by the end of the year or at worst it will be by March 2006). I just need to find a few places to cut my budget to fit the car payment in.

I think I would use my emergency fund for any of those things you listed.

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Avatar for mahopac
iVillage Member
Registered: 07-24-1997
Mon, 01-10-2005 - 7:00pm

I plan to use the increased bonus I will get this quarter to establish my emergency fund of $1000. This will be used for unexpected car repairs, dental work, or home repair - i.e. something that could come up completely unexpectedly. Those are the only things I can think of that are really unexpected, and the idea is to build the fund back up within 2-3 months every time it's used.

I don't see a need to build up a large emergency fund, i.e. 2 months' worth of expenses, which would be about $10,000, because our parents would always help us in that case, and in the current economy and in my current position, I could get another job within 2 months. And, to be blunt, if our parents died, we would inherit so much money from their estates that we would pretty much never need to worry about emergency money again.

Kelly

iVillage Member
Registered: 11-13-2004
Mon, 01-10-2005 - 8:27pm
I guess I am not sure what you mean by snowflaking, but I saved my full tax refund which was around $2000. I also saved approximately $300-400 or so per month out of my regular income. I have some debt, but not much cc debt; about $600; mostly I have student loan debt, which I consolidated for a low interest rate so its not urgent to pay off; at least not right now. I sold my old mobile home in 2003 when my ex and I broke up; and the buyers did a contract for deed. They gave me a small down payment; and payments of about $200 per month; which I immediately put into savings along with a portion of my own income; and any extra income. That is basically how I did it; It took about 15 months to do. I had dramtically cut my expenses when my ex and I split up; I carried pretty much all of the bills when we were together and pretty much lived paycheck to paycheck. I used a good portion of my income just to keep us above water; since he was always between jobs or underemployed. So it helped to leave the relationship since I felt that it was sucking me dry. I plan on continuing to save monthly and will take my tax return this year and pay off my credit card debt and put the rest in savings; then I should have my 8 month emergency fund which is my goal; then I can focus on paying off my student loans. Hope this gives you some good insight; thanks so much and take care!

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