Tuesday, June 30, 2009

Emergency Fund: What To Use It For?

Some recent events - like my car being towed and getting locked out of my apartment - have had me thinking what my emergency fund is really for. Obviously, yes, anything that constitutes (in my opinion) as an emergency; any unexpected, rare, sudden occurrence.

For instance, if May had not been a 3-paycheck month, I would have had to take the towing fees out of my emergency fund. If one of my roommates had not been coming home soon when I was locked out, I would have called a locksmith and would have paid for that out of my emergency fund. Luckily, I have not yet had to dip into the fund to pay for anything!

I then made a list of what I would personally use my E-fund for:

  • Job loss
  • Medical expenses
  • Taxes (if owe any)
  • Other: out-of-city/state moving expenses, major car repair (if car fund doesn't cover it), plane ticket to wherever in case of a family emergency/death
I am sure I am missing any sort of incidents, because who knows what could happen - but these are the "big ticket" items I could come up with.

Is there anything else you would add? What have you used your emergency fund for?

3 comments:

AussieSaver July 1, 2009 at 10:13 PM  

Great post. I'm still building my emergency fund but was starting to wonder why and what I would use it for!

Financial Elite July 4, 2009 at 9:05 PM  

Emergency funds are a must for everyone. Especially in these economic times. One biggie you are missing is job loss or unemployment. Everyone should should aim for having anywhere from 6-9 months of income set aside. I love to hear that you have emergency fund. Great job in leading by example.

Emergency Fund July 8, 2009 at 1:20 AM  

Thanks for sharing such great post, according to me there are numerous reasons when we need such emergency funds. By building an emergency fund you will feel more secure because you are prepared for the facing any financial crisis.

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