DR-Emergency fund rules?

[tbs727]

DH and I recently got enough surprise money to fund our baby emergency fund. I'm concerned about having that money accessible enough that we can use it in a true emergency but not touch it when we are tempted. What I would like to do is establish rules. Do any of you know if there good place where I can find examples, or do you have a list that you use yourself?

THANKS!

[Denvergirlie]

This can be the hardest part of setting up a new way of living and becoming debt free.

If it's a want - it's not an emergency.
If it's a need - it can be an emergency

If you are in doubt of if it's an emergency come back to a place like this and ask.

Wants:
TV broke - "need" (want) new one
Garage door opener broke


Needs:
Roof leaking
Flat tire
emergency medical care

Some things can be "fixed" cheaply - garage door opener - open the door yourself. TV broke - buy a cheap old one on craigslist or go TV free

You are going to be starting on a path of personal responsibility, you need to learn how to "control" yourself and figure out what the difference is between a want and a need.

I've had a EF for 2 years now - never have touched it, but the peace that it's there is wonderful should I ever actually NEED it. Sure I could have spent it 10 times over on wants but it's only for needs.

Sometimes people find that setting up a separte banking account just for the EF can help put resistance in there way. Go open an account at another bank. I have mine in ING, but in a true emergency it would take me a few days to get it out. However, one can also open an ING checking account and with a few clicks online transfer money to that ING checking account and access the funds with provided debit card.

It can be hard to silence in the inner child that wants it now, but it's also an opporuntiy to grow.

best of luck to you. Remember that you can always come back to a place like FV and ask others for advice like you are doing so now.

[sunshine]

I agree with the above -- you have to establish wants from needs.

Non emergency - dinner out, Christmas presents, clothing

Emergency - funeral expenses for your parents, car repairs (we do pretty good at having a fund for car repairs, but every once in a while it exceeds what we have), medical emergencies - above our budgeted amount for medical. . .

[Natalie]

Something I'm trying to remind myself:

“All too often a family's spending is governed more by their yearning than by their earning. They somehow believe that their life will be better if they surround themselves with an abundance of things. All too often all they are left with is avoidable anxiety and distress” --Joseph B. Wirthlin

That reminds me... if you have to much stuff, it owns you. I need to clean out that closet.... (and not replenish!)

[Greebo]

I can't think of anything to add that would improve on anything already said.

[frugalbabe]

One thing I do that helps is I have my checking account that I do all of my bill paying/purchasing with and hooked to that account is a savings account that I always keep roughly $500 give or take. The $500 is part of my savings and I do not do my monthly budget from it but it is easily accessible because as the mother of 4 little ones...well, things come up periodically that I could not have foreseen (Murphy is a big pal of all of my children!) in a separate account (ING) I keep my long term saving/EF that I add to each month that money is accessible but it takes about 4 days to get it. Since it is such a pain to get at it doesn't get touched. Now separating wants from needs is something we are still perfecting but I spend every cent of my dh's paycheck on paper before he gets it. Obviously there are the basic needs of shelter, food, electricity above and beyond that you and dh need to decide together what is a want compared to a need. And which wants trump other ones. Good luck! It is definitely an ever evolving learning process.

[peanut]

We're a bit stricter with our EF rules. DH doesn't believe in insurance, so it's my insurance if he dies. We have some insurance, just not a lot. The thing is, this is the money I'll be burying him with...or he me. So we simply do not touch it for anything if we can help it. That and the piddly amount of insurance we have are all I'll have to ease me into a new lifestyle with less money.

Jean

[57plymouth]

If you will not be able to get to work, or eat, it's an emergency.

Clothes, Christmas, school field trips, eating out, = Not emergency.

Broken (mechanical NOT cosmetic) car, empty fridge, illness = emergency.