When is it OK to dip into your emergency fund?

Stress-free saving

No one’s immune to financial crises. Here’s how to decide when to use your emergency fund.

You can’t put a price on the feeling of security. But you can save for it.

With an emergency fund, or what we at Truist like to call a financial confidence account, you’re prepared for almost anything life throws your way. It’s not pessimistic to prepare for what might happen—you’re practicing positivity by saving for a rainy day.

Building your emergency fund means saving a minimum of $1,000 and, ideally, continuing until you’ve saved three to six months of expenses that you keep in a separate, liquid, no-touch account.

But how do you know when to use your emergency fund?

“This is your go-to account, and it should give you a lot of confidence that you’re using it for exactly what it should be used for.” –Brian Ford, head of financial wellness at Truist

Don’t take emergencies lightly

It may seem obvious, but use your emergency fund for actual emergencies—sorry, fashion emergencies don’t count.

Brian Ford, Truist’s head of financial wellness, says, “Emergencies are truly unexpected and unforeseen. They’re something you can’t afford without causing some pretty negative emotional or financial impacts, like going into debt or borrowing money from a friend or family member.”

Use emergency funds for events that would prevent you from living a healthy or financially secure life if you didn’t use those savings. This could be something like a job loss, car accident, or damage to your home after a storm.

Don’t use your emergency fund for something you can plan for, like a vacation or regular car maintenance—use a major-purchase savings account for those things.

A financial emergency may look different to everyone—some people may not be able to cover a $300 emergency with their everyday bank account. For others, it may be $3,000. But the principle remains the same: Use your emergency fund only to cover events that are unexpected and urgent.

Know this is what you’ve prepared for

You might feel hesitant about deciding when to use your emergency fund. After all, you’ve likely spent months or years building it. But if you think of saving for emergencies like training for a marathon, the day you need to use your emergency fund is like race day. You’ve spent a long time training for this very moment. You should trust your training—or your savings—to help you succeed.

“This is your go-to account, and it should give you a lot of confidence that you’re using it for exactly what it should be used for,” says Ford.

Congratulate yourself for having an emergency fund. Don’t agonize over whether to use it, says Ford. Give yourself a pat on the back for saving money, as well as saving yourself the anxiety of not being able to cover an emergency.

Rebuild your emergency fund with confidence

The first step in replenishing your emergency fund is just to start. According to Ford, a lot of people don’t.

“It takes a lot of energy to create that account in the first place, and that’s why some people are reticent to touch it,” he says.

If you’re rebuilding your emergency fund, pay yourself first and make your saving automatic, just as you did the first time. Work it into your budget because you value the sense of security an emergency fund brings. You can gain a lot of mental clarity and comfort when you know you’ve prepared for the unexpected.

Bright Dickson, Ford’s co-host on the podcast Money and Mindset With Bright and Brian, advises imagining your future self. How will you want to feel when the next emergency happens?

“There will always be something else that happens—that’s just the way life works. Think about how good it was that you had savings, and start saving again.”

How do you get the motivation?

“It worked, right?” asks Dickson. “You did it; it worked. Let’s do it again. We’re not repeating a failure. We’re repeating a success.” 

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