When do you use your EF/how to decide?

[Judi Dial]

Ok. Bad month, actually it's a bad week. Between the tax preparer, the IRS, the dentist and the lawyer, 2/3 of DH's 2 week paycheck is going out the door for mostly one-shot expenses.

We have some savings and will use that. The dentist has agreed to let us pay the $ in 2 pieces, which has made this much easier too.

What put us over the top were the two that I didn't know what to budget or that I'd need to pay them at all: the IRS and the lawyer. The dentist we knew about a month ago, and so did something about it, the tax preparer also has a place in the regular budget.

I paid the lawyer from my business account for the moment, and the dentist deferring 1/2 the payment has kept this from being a panic, now, but we're likely to run short of our regular cash needs next week anyway.

So, do I crack open the EF if that happens? What do you think?

Judi

[PrairieGirl]

This is a tough one.

On one hand, I wouldnt touch the EF because you never know what can happen down the road.

On the other hand, if you can use your EF to pay off both the lawyer and dentist in one go, I'd do that just to be free of those 2 debts. Then, you can start aggresively building your EF again (and maybe double the amound, just in case, so you always have a more secure cushion??)

Good luck with your decision, its a tough one!

[Rosebush3]

If by NOT using your EF it will cost you more in interest, fees and peace of mind, then you should use it. After all, what is it for? If you don't use it, how will you get your needs met? How will you pay those bills if you are short money?
I vote for use it and replace it, and then work on adjusting your budget to accomodate such things.

[Judi Dial]

Thank you!

Judi

[Cricketlegs]

Define "regular cash needs".

If it is a simple matter of toughing it out and doing without for a week then leave the money alone because that would not be an emergency. If you have what you NEED to get through it is what I mean.

If it is serious and by serious I mean simple things like you need gas to go to WORK or you need food(NEED NOT WANT) or bills are due then yes use it.

[dcompton]

Dentists, lawyers, tax preparers, and definitely the IRS are not "wants" by anyone's standards. I'd use it. After all, what you put it aside for was to help when unexpected expenses all crop up at once. Just replace it as quickly as possible.

[Trishagirl]

I'd use it if you really need to that's what it's there for. Just be sure to put the money back asap.

[missmanny]

If it were me, and I couldn't negotiate the deadline, then I guess I would have to crack into the EF.

I wouldn't want the bills to not get paid... I also would prefer to not put them on credit.

[Judi Dial]

Dentists, lawyers, tax preparers, and definitely the IRS are not "wants" by anyone's standards. I'd use it. After all, what you put it aside for was to help when unexpected expenses all crop up at once. Just replace it as quickly as possible.

I really hadn't seen that these were not wants, but rather needs. That is, I hadn't looked at it that way at all! THANK YOU! Now I have a real yardstick for when to use our EF and when not to that although I'd "known" this, hadn't applied it.

Thanks again --

Judi

[my4littlebuffaloes]

When I am in situations lime this I try to squeeze as much out of my regular budget as possible to cover the bills, and then don't feel guilty for pulling the rest out of the EF, that is what it is there for. The IRS needs to be paid right away if you haven't already done it and use the EF if you need to. good luck!

[onencgirl]

I use mine for emergency situations where I don't have the extra $ to cover the expense. Such as hot water heater, tires, fridge, etc.

[MomToTwoBoys]

Our EF is being retooled this time around but the use will be the same:

Use it when we don't have enough in our accounts to cover it. Use it to avoid going into overdraft. Use it in place of using the credit cards.

If we're not being reimbursed for our expenses, the EF is used. Things like dental visits are subject to reimbursement and the reimbursements come about a week after an electronic claim is made. We use the CC for that and put the reimbursement amount back onto the CC.

[Greebo]

IRS = Emergency.
Lawyer = Pay as you can, IMO.

[Thevail]

I'm trying to make peace with my EF too! I love the security of a nice healthy EF, but I started getting worried that I was getting a little too attached to it.
I don't want any money to control my life or how I feel, not the money I don't have, nor the money I do have. DH and I decided that our EF is simply what we have instead of a credit card or debt.

Life is full of unexpected (and mostly annoying) emergencies. They are what cause 80% of people to "go under". We are struggling to really realize that what we have in our EF is a sort of "credit card" with a certain limit, just like anyone else's, only we control the limit by how much we put into it.

And that we should be just as careful of how we spend money out of our EF as we would be if we were getting charged interest on it. BUT..that it's also there for a reason, to cover the same expenses that others might have to put on credit because they don't have an EF.

There is no shame in using your EF for things you need, whether it's an IRS payment, or a busted window, or a dentist's bill. Just make sure you "pay it off" with the same alacrity that you would use if you knew it was going to cost you 20% not to.

[ml2620]

Not to hijack the thread, but how do you deal with car repairs? Is that money in the EF? I know they money is going to be needed for car repairs, I just don't know when....so does it sit in the EF until needed, or how do you handle that....?