Jan 1st, 2009
What Counts as an Emergency?
I keep going back to the issues I had with my truck (not fully resolved yet, even though it is operational). Fortunately, I was insured, although I had a deductible of $500, which I needed to tap into my emergency fund to pay.
I had additional expenses as well. Because I was without a vehicle–which I need to make it on time to my two jobs–I rented a car for about a week. That was an additional $224, which I also thought was justified to come out of the emergency fund. How about gas? No. I’d have been paying for gas anyway.
While having an emergency fund is great, it can be a temptation if you’re in need of cash. Defining what a true emergency is and having the discipline to stay away from the fund in non-emergent matters is key. A vehicle repair is an emergency here; but what about a computer crash? Hard to say. In my case, since I use my notebooks for work and for this blog, I would say that qualifies, but maybe not for others. A wireless router dying? I would say no.
Just as importantly, an emergency fund needs to be replenished after it’s tapped into, which is one of the things I’m going to be working on doing over the next few month–so frugality is still key even with the emergency fund when crisis truly does strike.
[...] Suenaga presents What Counts as an Emergency? posted at Uncommon [...]
Good question. It certainly is important to define for what purpose your emergency fund can be used. Different things for different people. If my wireless router went out, it would be an emergency but, since they’re not that expensive, I wouldn’t need to dip into my emergency fund to get a new one. I found I was using mine to fill shortfalls in my property tax bill every January. Hardly an emergency, since I know it’s coming up. I opened a separate account to deal with that and resolved that issue. Good article!
[...] Suenaga presents What Counts as an Emergency? | Uncommon Cents posted at Uncommon [...]
[...] While I scour the Internet (including Nashbar, eBay, and Craigslist) for a suitable replacement (and kick myself over the theft), I’m using all of the techniques I’ve talked about before, and unless one of a few eBay things I’m inquiring about (shipping to Hawai’i, anyone?), I am considering whether this incident warrants yet another trip to my emergency fund, something I’ve talked about (and done recently). [...]