I Am Possibly Insane About My Emergency Fund

OK, here is the down low on me: I am kind of a crazy person.

I realize that, by the standards of people on the internet, I act fairly sane. I have a 401(k) invested in index funds! I write in complete sentences!

But a number of recent occurrences have caused me to question the state of my mental regime, none more so than my realizing I would literally rather go into debt again than use my emergency fund.

A brief history of my attitude towards emergency funds:

1) The first 35 years of my life, when I’d literally never heard of them.

2) That time a year ago when I wasn’t sure I needed one at all.

3) The time when I decided to be reasonable and set a goal of six months of expenses, or $5000.

4) The time when I had $4000 sitting in a bank account and don’t want to use it even for valid emergencies, aka right now.

What brings this up is that within the last couple of months I’ve had what I’d consider two bona fide emergencies: car repairs ($400+) and my broken hard drive ($200+). These haven’t been the kinds of emergencies where you suddenly really need to go on a Hawaiian vacation, or really need an entire new wardrobe. They’re the kind of thing emergency funds were made for. Furthermore, cash flowing them has been really painful to my very tight budget. I fit the car repairs in only by pushing $175 off to this month, which of course left not much room for a sudden $200 fee, especially towards the end of the month after I’d spent a fair amount of my discretionary funds on, well, discretionary things (clothing and gifts for friends, mostly.) I’m pretty much tapped out on non-savings-account cash now. Only the fact that I’ve had a massively good side hustling month in June has allowed me to get everything in there at all.

Despite this situation, I never once considered withdrawing from the e-fund for the car repair. The thought did cross my mind for the computer, only to be met with an immediate NO NO NO reaction from my subconscious. Which is when I realized I would rather carry a credit card balance if I had to, instead of taking $$ out of my e-fund.


I really don’t know where this is coming from, exactly. Trying out different scenarios in my head, and I think one of the problems may be that it’s not full yet and I don’t want to use it until it’s full, because that would delay meeting my goal of having it done by the end of the summer, and I don’t want to do that. I’ve been so looking forward to not having to immediately divert that $500 every month. But being real, the money is the money; it’s going to get spent on the computer no matter what account I take it from.

So I dunno. I guess I have to think more about this, because there’s no point having a big savings account if I’d really prefer to use my credit card instead 🙂

41 thoughts on “I Am Possibly Insane About My Emergency Fund

  1. Your reaction seems super normal. When you’ve worked hard to build something, it makes sense to want to hold onto it. We can tell you, for moral support purposes, that while it stings to spend e-fund money, the sting dissapates quickly, and then you work to build it back up. And it gets easier with time too. You’ll make the right decision. 🙂

    1. thesingledollar says:

      Good, I am glad to hear that with time I will become less crazed!

    2. I agree with this. Loss aversion can be a tricky thing to deal with and feeling like you’re losing ground on a goal that you’re actively working toward is a tough one to swallow.

      1. thesingledollar says:

        Loss aversion! Yes, that’s a good technical term. And I hate losing ground. Treading water is ok, for some reason, while backsliding just feels awful.

  2. I totally get it. I’ve had the same feeling about our e fund, now that we finally have one. But I think it’s a little nutty to pay credit card interest when the funds are available. (This is was I’ve told myself about an anticipated car expense, anyway. I’m not saying you’re nutty… exactly…) 🙂

    1. thesingledollar says:

      Well, as it happens, I have cash-flowed everything…this time. 🙂

  3. Maybe that means your e-fund isn’t big enough? I hear ya, though. I don’t like to transfer money from savings either. It hurts!

    1. thesingledollar says:

      I think — I hope — it just means that I don’t want to use it before it’s “full” (I still have $1000 to go.) But yeah, I’m just hating to spend money on things lately, especially on repairs and maintenance!

  4. Debt Hater says:

    I can understand not wanting to tap into your savings, because it’s nice to have that comfort and you don’t want to take it away. I don’t think you should go with carrying a balance over reducing your emergency fund though! Put it on the card and then pay it off right away with the emergency fund 🙂

    1. thesingledollar says:

      Hee, yeah, that’s what I’d do if I weren’t able to cash-flow it…I just really really don’t want to.

  5. Chonce says:

    I am the same exact way, and I do feel pretty weird about it from time to time. When I need car repairs I always try to stretch the money I have in my checking account instead of relying on my EF like I’m supposed to. I think a big part of it is due to the fact that my EF isn’t fully funded and I haven’t reached my goal yet. Even then, it’s extremely hard for me to withdraw from the fund and risk losing the security it offers me. I’m trying to work on my issues with it though and I’m going to try to save up a cash buffer to use as the first defense to unexpected expenses and avoid having to use my credit cards.

    1. thesingledollar says:

      Yeah, that’s what I want — a cash buffer I can turn to instead of the e-fund. And I agree that a lot of my reluctance has to do with the fact that I haven’t reached my goal of filling it up yet — I hope that when I’ve done that I’ll feel less weird about using it!

  6. Megan says:

    I am the exact same way. I have a hard time, sometimes, understanding the purpose of an emergency fund in my life because I never, ever touch it. It’s like in my mind the only circumstances under which I will touch my emergency fund is involuntary job loss, and since that hasn’t happened so far my fund just sits there while I pinch pennies to take care of unexpected financial expenses that crop up from time to time. It’s really hard to loosen up my rules on when I can touch the e-fund. I have this idea that I will be 90 years old and that money will just sit there unused forever.

    1. Megan says:

      I should add that the fact that this money just sits there bugged me enough that earlier this year I put the entirety of my emergency fund (about $6000) into a low-risk fund in my Roth IRA. I know some people are not fans of this strategy at all, but I’ll see how it goes.

      1. thesingledollar says:

        Hah, I didn’t know so many of us felt this way! I need to do some mental work on this, clearly, but yeah, I do think I might eventually move some/all of it into the market. Not right now, but maybe in a few years if I have more of a normal cash buffer.

  7. Cindy says:

    Guilty! I have that issue with my emergency fund, and pretty much anything else that I’ve saved a large amount of money for. Example: I saved thousands of dollars to finish my house before putting it on the market. It was meant to cover everything, but I found myself using my spending money to cover little things, instead of taking the money I’d saved specifically for that! Maybe part of it is that having large amounts of money in the bank is something fairly new (for me, at least), and it’s really hard to let go of what was worked so hard to attain! Or maybe I just really am crazy!

    1. thesingledollar says:

      I think what you mention has a lot to do with it — I’ve never had this much before and I don’t want to start drawing on it before I can look at it all finished and admire it 🙂

  8. Kirsten says:

    I’m kinda the same way! We have a small emergency fund that had quite literally never been touched, even when our fridge broke and our car needed some repairs. It’s hard breaking into that money. I’m not sure why but it’s been a barrier of ours for a while.

    1. thesingledollar says:

      I guess it’s good that it is hard, otherwise we’d use it for everything, but still, I’d like to know that I could use it if I had to 🙂

  9. I think of it more as a “piece of mind” fund. It’s really just psychological for me and provides a sense of security even though I know I’ll never touch it unless I absolutely have to!

    1. thesingledollar says:

      Good point — its function is more psychological than anything else, maybe, which is why I don’t want to make it “real” by drawing on it.

  10. Ugh. Maybe something is wrong with me, because I feel kind of the opposite. I have a hard time not touching my efunds. I think I think of them as “backup money” instead of for real emergencies and especially at first, ended up spending them every month. I’ve been better about forgetting about their existence though, and I’m finally gaining some steam. Slowly but surely.

    1. thesingledollar says:

      I only have the one, and I have been more successful than I thought I would be at erecting that mental barrier, I guess. In the past when I saved several thousand dollars I always spent it within a year at most (on a big trip, or on the basics while I was unemployed.) So I was skeptical that just by naming a bank account the “emergency fund” I’d really leave it alone, but it seems to be working, perhaps all too well!

  11. I think I am just as intense about our emergency fund. We contribute to it regularly and once money is in there, I have a really hard time withdrawing money from it. I agree, it should only be used in absolute emergencies, and sometimes even in emergencies, I would rather take money from elsewhere in my budget and cut back in areas that are not required (entertainment, clothing, etc). However, I would never carry a credit card balance to avoid withdrawing from the emergency fund! AHHHH! That stresses me out 🙂

    1. thesingledollar says:

      right, I know? It’s funny how our brains work sometimes!

  12. Your reaction reminds me of how I felt when we didn’t pay off the business debt at the end of May, and I REALLY wanted it to coincide with the 3-year anniversary of our journey out of debt. It is rather neurotic, right? (I’m speaking about me too here.) I think that a wealth-building mindset is not in such bondage to the schedules and boundaries that we impose with a sense of – I think – panic. I would encourage you, next time you encounter an emergency, to use your emergency fund. My theory is that in so doing, you’ll confront your panic demons, develop cool confidence, and set yourself up for wealth building from a position of strength.

    1. thesingledollar says:

      I was actually totally thinking about you when I wrote this! Impatience, impatience, impatience 🙂

  13. Kristin says:

    Ha, I’m similar to you. I don’t want to touch anything I’ve set aside. I would rather go side hustle and make more money (and then become more exhausted) than dip into some emergency funds. I kindof look at my finances and think it, ok what can I cut again to make this work?

    1. thesingledollar says:

      “What can I cut” is totally where I want to go! Problem is sometimes there’s not much left to cut 🙁

  14. Jason says:

    Oh, I don’t think you are that insane. I mean I think the same to myself. We recently had our air conditioner condensor go on the fritz. Now air conditioning is not necessarily an emergency. I mean we can live with out it and upstairs we have window air conditioners. Others in my house think differently, but I didn’t want to dip into my emergency fund to pay for it. Instead I attempted to cash flow it and ended up pushing some bills off until next month when I will get three paychecks instead of two. I am not late on my payments I just delayed them. So you aren’t that crazy, but I do wonder what it would take for me to use it and not be a bit panicked about it.

    Of course then i think about draining it all and paying off this loan I have. If you think you are crazy then I am schizophrenic.

    1. thesingledollar says:

      Hee! We all have our different kinds of insanity. Speaking of a/c, we have it but my housemate and I have been resisting actually turning it on. So far we’ve managed to sleep ok at night, which I think is our tipping point, but we’re pretty sweaty.

  15. Hannah says:

    I actually think its really smart to not touch the e-fund unless you literally can’t cash flow something, and you also haven’t saved for it.

    For example, we ran our car repair fund down to empty a few months back, but we also knew we needed some costly but routine maintenance/fees (new tires, oil change, inspection, property taxes, etc.). We held off on those for 2-3 weeks until we could budget for them (with a much higher than normal amount in the “car fund”).

    It’s personally helpful for me and my husband to do that because otherwise we have a tendency to underestimate how much we spend on various things.

    1. thesingledollar says:

      OK, I’ll take the interpretation where I’m really smart instead of totally nuts 🙂 Interesting about the underestimating — I think I’ve been doing that too, which is one of the lessons I’m taking out of this first year of budgeting.

  16. FI Monkey says:

    I’m with you on that. I am about to hit 100% on my six-month emergency fund, and I feel like something is really going to have to qualify as an actual emergency to get me to remove money from it.

    It’s great to have $50k sitting around in case I need to buy up some emergency stock during a down market, for example. Or if some amazing real estate deal comes up — emergency!

    I don’t necessarily want to use my credit card though. I’d rather just move money over from my normal savings to cover small emergencies. I can then replenish that at a slower pace with emergency funds.

    The trick is always re-filling both over time. I don’t think that’s immediately obvious to anyone starting an e-fund.

    1. thesingledollar says:

      $50K! Wow, that’s impressive 😉

  17. ARBM says:

    A few weeks ago, I would have said I am totally the same… that I wouldn’t want to touch the emergency fund, but then stuff happened… and I am now using my emergency fund to pay for things… not emergency things really… but things that I hadn’t saved up quite enough for in time… I’m really hoping that once the craziness of this summer subsides (after my wedding), then I’ll be able to concentrate on filling it back up again.

    1. thesingledollar says:

      I’m sorry stuff’s been coming up 🙁 Hope you can fill it up soon.

  18. A few years ago, we scraped together about $400 into an EF… then an expense hit that was even more than that. So we emptied it out and started over. And another expense hit (we’d just moved into a house) and emptied it again. We finally got it up to $250 in the EF. And then were faced with a $1,500 car repair.

    I realized that it’d be more mentally upsetting for me to empty the EF *again* than to float it on the credit card for a month. Yeah, we paid about $15 in interest, but it was totally worth the peace of mind, knowing that we hadn’t once again gutted the EF.

    Nowadays, I barely touch our much more substantial emergency fund. If something unexpected comes up, we take it out of savings. Because, dammit, it’s just so pristine and pretty!

    1. thesingledollar says:

      Yeah, I really want to have “savings” as distinct from “emergency fund” — right now I only have the EF, really, so I’d like to build up some first-line-of-defense savings accounts and not have to touch it.

  19. NZ Muse says:

    Yeah same. HATE dipping into savings. Even if that’s what they’re for.

    1. thesingledollar says:

      I’m glad I’m not the only person who feels this way!

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