Having three to six months of living expenses saved in an emergency fund can provide you with a financial cushion when an unexpected expense arises or your life situation changes. But it’s important that you keep this fund intact in case of a real emergency. You should not use it for expenses that are not unexpected, necessary or urgent.
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In a Ramsey Solutions article, the Ramsey team describes non-emergency situations you should not spend your emergency fund.
Also check out seven times you should dip into your emergency savings.
Christmas or back-to-school shopping
An emergency fund should be used for unexpected expenses. While you may unexpectedly go over budget when purchasing gifts or back-to-school supplies, these are predictable expenses that you need to be financially prepared for.
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Regular monthly expenses
Expenses that you know you have to pay every month, like housing or cell phone bills, should be part of your budget. You shouldn’t have to dip into your emergency fund to cover these bills.
Basic home or car maintenance
You should allow some wiggle room in your budget to cover regular maintenance on your home and car, such as an HVAC service or oil change. These are expected expenses. Your emergency fund should be saved for unforeseen needs, like fixing a major leak or repairing or replacing a car following an accident.
Routine medical visits
Medical emergencies are legitimate reasons to dip into your emergency fund, but routine doctor visits are anticipated expenses you should be prepared to cover financially.
You may want to upgrade your car to the newest model or buy the latest iPhone, but it’s both. wannanot needsand therefore should not be paid from your emergency fund.
Last minute vacation
You might be tempted to dip into your emergency fund if the opportunity arises for a last-minute vacation, perhaps a friend invited you to join them at the last minute, or a deal came up that looks too good to pass up. But again, this is not an emergency. It’s great to save money for a vacation, but that money should be kept in a separate fund from your emergency fund.
A sale on something you want
If you’re in the market for a big-ticket item, like a new TV or a pair of designer shoes, and it’s on a big sale, now might be the time you’re tempted to spend that money on your emergency fund. But this is not an urgent expense, and therefore not a reason to hack your fund.
If your favorite artist is coming to town, you may want to splurge on concert tickets using money from your emergency fund. But again, this isn’t an emergency expense: you can save money now to catch the artist next time.
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This article originally appeared on GOBankingRates.com: Dave Ramsey: Stop Spending Your Emergency Fund on These 8 Non-Emergencies.
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