Situational Budget - Emergencies
Budgeting Money For An Emergency Fund - Page 1

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Budgeting money before an emergency comes is the best way to prepare for the unexpected...

Setting cash aside for rainy days gives you an umbrella of protection. Saving money in an emergency fund also creates a strong foundation for your household budget.

Share what you use
your emergency fund
for, or read our
Giant Created-by-You Emergency Fund List.

Rainy Days

It rains...

You need an umbrella.

Your emergency fund is your umbrella.

Is rain unexpected? We know it will happen, just not when.

Are emergencies unexpected? Like rain, we know something will happen, just not when.

What was your last emergency?

A late night at the hospital emergency room?
A blown tire on the freeway?
Or was it a sale too good to pass up?

Wait a minute! A sale too good to pass up?

Is that really an emergency?

It certainly may feel urgent, but I promise you it is not an emergency.

I learned this first hand...

Years ago before I knew anything useful about budgeting money, my wife and I set aside $100 as an emergency fund. We locked it in a box and both of us had to approve what is was spent on before getting it out.

...but our neighborhood in Dallas had excellent yard sales:

"How much do you want for it?"
"We just need to get rid of it. $80 and it's yours."

We agreed this was an emergency. We drove all the way home, unlocked and opened the box, grabbed the cash, and have used that couch for over five years.

We were flat broke and spent our emergency fund on a couch! So much for budgeting for a true emergency.

That was not a good idea.

The thing is, we needed to know ahead of time what qualified as an emergency before it happened. So we made a list...

What is a Real Emergency?

View our giant list of user-submitted emergencies. »

Here are the Top 10 Most Stressful Life Events according to the Oxford Journal of Occupational Medicine Life Events Inventory. I have hilited the events that would likely be emergencies:

Death of spouse, immediate family member, or close friend, or immediate family member attempts suicide,
Yourself or immediate family member sent to prison
Getting into debt beyond means of repayment
Period of homelessness
Immediate family member seriously ill
Unemployment of main earner
Divorce
Break-up of family
Sudden and serious impairment of vision or hearing
Infidelity of spouse