What Actually Qualifies as an Emergency?


We’ve heard the phrases, discussed our strategies, tried to forget about the money when we make a budget, and several other things pertaining to the vital emergency fund. Save up an emergency fund :: How much is in your emergency fund? :: Is an emergency fund necessary? :: Can I have an alternative emergency fund?

We all have a firm grasp of what a fund is. We can also agree that we may need some cash in case of an emergency. But the real question is, what is an emergency? Rarely is the appropriate time for using an emergency fund more than briefly mentioned. Here are examples of real emergencies when it is OK to dip into that emergency fund:

A natural disaster is a pretty obvious e


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8 Responses to What Actually Qualifies as an Emergency?

  1. Monkey Mama says:

    Precisely my personal definition of an emergency fund (which I find rather rare). I mean, for us it would have to be a significant emergency.

    Great post.

  2. Jay Gatsby says:

    An emergency fund is to be used for things that legitimately qualify as an emergency. Badly needing a vacation or finding something you really want for a fantastic price are NOT emergencies. More importantly, you MUST replenish your emergency fund once you are in a financial position to do so. This will require sacrifice, but it’s better than not having an emergency fund the next time you need it.

  3. James says:

    An emergency is when you come home to find your basement flooded with sewage, your dog needs serious medical surgery and it’s winter so your gas bill doubles all while being in debt and taking over some serious family debt!

  4. Scott @ The Passive Dad says:

    An emergency could be anything brought on by temporary loss of income or lifestyle change. Losing a job, an illness, parent requiring assisted living, these are all unexpected reasons to have at least 10% or more in an emergency savings account. Shoot for $1k as an initial goal, but plan for 6 months savings. You never know what will happen.

  5. GoldWhy says:

    Really interesting post. As an added precaution, I think every emergency fund should include gold and silver physical bullion, most of which is in your safe deposit box but also some of which is on your person. If your identity is stolen, hopefully your safe deposit box will remain untouched. What if the banks implode? Your physical bullion on your person will provide emergency “cash” because it always has intrinsic value. In the emergency of national disaster, the US Dollar may be worthless. Gold and silver are always a great store of value even in emergencies. No need to go overboard but a prudent 5% of your net worth in bullion provides added security in the event of an emergency.

  6. Miranda says:

    Great post! I agree that one of the most important things to do is replenish your emergency fund. The nice thing about have the fund is that you can “borrow” from yourself instead of paying interest to someone else. But you have to remember to “pay yourself back”!

  7. leslie says:

    Timely post. We just found out that our heat/AC unit (Gas Pack) have to be replaced before heating season. That gives us about a month to a month and a half to come up with roughly $4500. We can take care of part of it out of current income over that time period but would be in dire straights without our emergency fund. And, as is usual with these sorts of things, our dishwasher is beginning to fail too as well as our DVD player.

  8. Kristie Tamsevicius says:

    When people don’t have reserves for emergencies is when they get in trouble. And not everyone has a credit card to use. Those are the times when getting a cash advance can help you get by until payday. And for just the reasons you mentioned: family medical emergency, repairs, disaster, etc. When used responsibly, a payday loan provides the emergency cash you need for short term cash flow problems. Life doesn’t always go according to plan. So knowing your “plan B” helps you get by when you are in a pinch.

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