Is it still okay to loot your emergency fund for a non-emergency?

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You’ll often hear that building an emergency fund should be your top financial priority — and for good reason. Without emergency savings, you could be immediately forced to rack up costly debt in the event of unexpected bills that your paycheck can’t cover. Also, in more dire circumstances, not having an emergency fund could put you at risk of losing your home if you were to lose your job and remain unemployed for months.

As a general rule, it’s a good idea to set aside enough money to cover three to six months of living expenses. You should keep this money in a savings account so that it is accessible to you at all times.

You may, from time to time, need to dip into your emergency fund to cover expenses such as an unexpected car repair or a medical bill for a sudden illness or injury. And if you lose your job, you may have to fall back on your emergency savings until your unemployment benefits start rolling in.

But is it still acceptable to withdraw an emergency fund for a non-emergency matter? For the most part, this is not good practice. But there may be some exceptions.

When you forgot an invoice that cannot be delivered

There’s a difference between unexpected expenses and expenses you forget. Suppose you are a homeowner who pays your property taxes quarterly. If you forget to budget for these taxes, you could end up in a situation where you owe your township $1,000 but don’t have the money in your checking account. In this case, while the expense in question shouldn’t have come as a surprise, you should feel free to take an emergency cash withdrawal to cover it in the absence of other options.

When you preferred to save more

There may come a time when you’re tempted to dip into your emergency fund for a non-urgent matter, like going on a trip or buying furniture. You might assume this is an absolute no-no. And for the most part, it is. The only exception is when you’ve really overfunded your emergency savings and can afford to withdraw the money.

Let’s say you were spending $3,000 a month on essential living expenses, so you saved $18,000 in your emergency fund. If you’ve since downsized your living space, your essential monthly bills may now be just $2,500, which means $15,000 in savings gives you plenty of emergency money to work with. In this situation, you can probably get away with making a non-emergency withdrawal as long as you leave enough money to cover those six months of bills.

An emergency fund can serve as a buffer against life’s many unknowns. Although it is generally best to only draw from this fund for a true emergency, there may be exceptions. But in general, it’s better to save in advance for other things and keep an eye on your expenses so that none of them surprise you.

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