Emergency funds are a must. They protect you from life’s unexpected expenses, keep you from going into debt for unplanned car repairs, medical bills, or home maintenance. While these statements are true, they may not motivate everyone to reduce their spending on fun things to prepare for not so fun things in the future. With that in mind, today I’m trying a different approach in motivating you to have an emergency fund. You see, an emergency fund can also be used to take advantage of opportunities for unplanned fun!
Using The Emergency Fund For Fun
A friend recently suggested we get a group of people together and rent cabins on a lake in late summer. Research was done, a location found, and pricing info sent out. A deposit would need to be paid upon booking, the rest to be paid closer to the arrival date.
The amount of the deposit wasn’t huge, but it didn’t fit in our budget that pay period. We agreed to take the funds from our emergency fund. We paid our portion of the deposit and are looking forward to a fantastic four day vacation with friends on a lake later this summer.
Avoid Emergency Fund Abuse
There is certainly nothing wrong with using your emergency fund to take advantage of fun opportunities. However, be very careful to not deplete your fund to the point you are unable to handle a real life emergency.
Emergency Fund Repayment Plan
As with any withdrawal from your emergency fund, immediately make plans to replace the funds.
Without an emergency fund we likely could not have taken advantage of the vacation opportunity without using credit (which could tempt us to pay off slowly and therefore pay unnecessary interest). By making an effort to have a well funded emergency fund, we had cash reserves that made the decision to say, “Yes” easy.
How about you, EOD Nation, do you use your emergency fund to take advantage of fun opportunities?