Use your emergency fund, but follow the rules – The Royal Gazette | Bermuda News, Business, Sports, Events, & Community

Log In

Reset Password

Use your emergency fund, but follow the rules

Dear Dave,

My husband and I just completed Baby Step 3, and we have six months of expenses saved for an emergency fund. How should we determine when something is actually an emergency?


Dear Riley,

Congratulations on doing the work, being disciplined, and saving like crazy! Now you've got peace of mind, and a pile of cash, that will help turn an emergency into nothing more than an inconvenience.

There's no shame in using your emergency fund if you really need to. That's what it's there for. Just remember to ask yourself a few questions anytime something pops up to make sure you've got a real reason to use it.

Is the expense really unexpected? Christmas happens on December 25 every single year. You know your semi-annual car insurance payment is coming, too. Make sure things like this are part of your regular, monthly budgets. Some examples of unexpected expenses might be a job loss or pay cut. Emergency medical expenses and car accident repairs might fall into this category, as well.

Is it absolutely necessary? Most people say they know the difference between a want and a need, but that's not always the case. Replacing your only mode of transportation would be a need. Upgrading to a newer, fancier car is not. If your car goes down for the count, you need transportation. Use your emergency fund to buy something affordable and reliable you can pay cash for. But don't dip into it just to upgrade your decent car for one with a million bells and whistles.

Is it urgent? Practice the art of patience whenever possible. If your home's air conditioning unit goes out in the middle of summer, that's probably an urgent fix. But hearing about the “sale of the century” at your favourite retail store? Grabbing the newest, hottest mobile phone when yours works just fine? Nope!

Your emergency fund is all about long-term security, not instant gratification. Don't blow it impulsively, but don't be afraid to use it when it's really needed. Be wise, and ask those three questions. Check yourself so you don't wreck yourself — or your budget!


Dave Ramsey is CEO of Ramsey Solutions. He has authored seven bestselling books, including The Total Money Makeover. The Dave Ramsey Show is heard by more than 16 million listeners each week on 600 radio stations and multiple digital platforms. Follow Dave on the web at and on Twitter at @DaveRamsey.

Cash cushion: your emergency fund is all about long-term security, not instant gratification. Don't blow it impulsively, but don't be afraid to use it when it's really needed (File photograph)

You must be Registered or to post comment or to vote.

Published April 04, 2020 at 9:00 am (Updated April 03, 2020 at 10:04 pm)

Use your emergency fund, but follow the rules

What you
Need to
1. For a smooth experience with our commenting system we recommend that you use Internet Explorer 10 or higher, Firefox or Chrome Browsers. Additionally please clear both your browser's cache and cookies - How do I clear my cache and cookies?
2. Please respect the use of this community forum and its users.
3. Any poster that insults, threatens or verbally abuses another member, uses defamatory language, or deliberately disrupts discussions will be banned.
4. Users who violate the Terms of Service or any commenting rules will be banned.
5. Please stay on topic. "Trolling" to incite emotional responses and disrupt conversations will be deleted.
6. To understand further what is and isn't allowed and the actions we may take, please read our Terms of Service
7. To report breaches of the Terms of Service use the flag icon