What constitutes an emergency? While it is obvious that losing your job, wrecking your car, or major health problems fit the category, you really need to define “emergency” for yourself. This is a wise thing to do because it will probably keep you from frittering away your emergency fund on impulse purchases.
I know, I know, this requires discipline, and that’s never fun. I mean, there are going to be times when you’re tempted to use your emergency fund to buy some big ticket items. You’ll think to yourself “I have $1000. I can afford this. I’ll have time to save up again!”
Whenever you face that temptation, think about your own personal list of emergencies. Would you rather have a new gadget. . .or be able to pay your bills if you get hurt or lose your job? In truth, you can’t know for sure if you’ll have time to replace the money you spent.
As always, it’s up to you, but please realize that every time you spend money from this fund on non-emergencies, you’re putting yourself and your family at risk. Remember that once you’ve met your goal, you’re more than free to continue saving money (preferably in a different account) for things you want! But keeping that initial amount in a separate, slightly hard to access account is a dang good idea.
No post tomorrow, because it is Thanksgiving! I’ll be back Friday with an announcement. ‘Till then, keep workin’ toward those goals, and happy holidays!
