What constitutes an emergency?

[abbyndrewmom]

My dh & I were meeting with our financial advisor & discussing our life ins needs. As we were going through our assests we came to our emergecy fund - I did not want to include as part of our assests as I have no plan of using it Our advisor asked me what I considered an emergency if not a death? It got me thinking about what would constitute an emergency.

 

[disneymom2003]

When you are laid off and need to use it to pay monthly expenses.

Major car or home repairs.

i consider those things that you would use an emergency fund for

 

[charming23]

Basically what the PP said and also for if a family member becomes ill and medical insurance will not cover all of the expenses.

 

[SandrA9810]

If you're getting life insurance, that should cover death and related expenses, so I wouldn't include that as part of an "emergency".

Laid off is a good emergency fund use. So is keeping some one alive, or the car running, and the house dry and warm. Anything that is a large expense, that you couldn't afford normally.

 

[SusieStone]

I consider death an emergency for the fact that when my DH died, it was suddenly, he had insurance but it doesn't pay the moment he did die. We had funeral expenses, out of work time, bills such as utilities and water went up because of all the extra people at the house, the cost for all the death certificates I had to get, attorney fees, etc. I later replenished the fund once the insurance money came but it wasn't immediate.

 

[nowellsl]

I use mine for anything necessary (car repairs, appliance etc.) that I would otherwise have to charge or borrow money for. Last year I used part of mine to buy a used car. I hate paying interest. It's still not back where it was before the car purchase, but close and I don't have a car payment!

 

[AntePrincess]

Anything that goes wrong that would keep the family from taking care of itself in the usual fashion (ie, working and paying for it on time) would be an emergency. So, the car breaking down when there's no alternative to get to work, would be an emergency because without dipping into the emergency fund or having some sort of car insurance that would cover the breakdown, you'd be in a downward spiral.

There are different ways to handle these different emergencies. We're building a tax-sheltered health savings account (HSA) for handling medical emergencies, so that fund is separate from the general emergency fund. Life insurance is separate. Then there are "insurance" programs like AFLAC which will give you cash pay outs during an emergency to cover things like groceries when you have a medical crisis, which I have to admit are intriguing, but I haven't looked deeply into them.

 

[neatokimmo]

It takes weeks to get life insurance money. You should have enough to cover funeral expenses in something very liquid. If you are married, it needs to be in both of your names.

My Dad died 2 weeks ago. I really had to scramble to get enough together for the service (and it was a very low cost service at that). If you have kids, you don't want to do that to them.

 

[HeyIt'sMe]

We have two Emergency Funds.

Emergency Fund #1 - This covers large expenses like house repairs, car repairs, OOP medical expenses.

Emergency Fund #2 - Covers 6 months of basic living expenses - mortgage, utilities, food, etc.

 

[lisaross]

We have two Emergency Funds.

Emergency Fund #1 - This covers large expenses like house repairs, car repairs, OOP medical expenses.

Emergency Fund #2 - Covers 6 months of basic living expenses - mortgage, utilities, food, etc.

This is pretty much how i have it set up...my 1st Emergency Account i keep $1000.00 i use this for any repairs needed etc. !

My 2nd Emergency fund also has about 6 months living expenses!

 

[disneygals]

It takes weeks to get life insurance money. You should have enough to cover funeral expenses in something very liquid. If you are married, it needs to be in both of your names.

My Dad died 2 weeks ago. I really had to scramble to get enough together for the service (and it was a very low cost service at that). If you have kids, you don't want to do that to them.

Sorry about your dad.

On a happier note, your daughter is so gorgeous!

 

[AntePrincess]

It takes weeks to get life insurance money. You should have enough to cover funeral expenses in something very liquid. If you are married, it needs to be in both of your names.

Agreed. And don't rely on "prepaid" funeral arrangements, either. Snuck back in most of those contracts are clauses that allow them to raise the prices later on "to keep up with inflation," although they try to sell you on the plans by claiming they lock in savings in the first place. Not to mention that they'll still try to upsell the survivors. The exception to this are genuine memorial societies, which are kind of like co-ops for funeral arrangements, but you generally have to be members of them well ahead of time. (If anyone is as morbidly interested in these industry expose type books, check out "American Way of Death." Phenomenal book, and not as depressing and dreary as you might think.)

 

[Piecey]

Our emergency account is anytime we're faced with a large expense and we have no means to pay for it.

And by means I mean cash. I avoid interest as much as possible.

We have three savings accounts, though. One has $1500 in it and would be the first place we turned if something happened and we needed cash quick since it's with our local bank. Things like.. a new oven, tires, car repairs, medical expenses, etc.

The others are ING accounts, so the money is not as accessible quickly-- one is our emergency emergency account. It would pay for a years worth of utilities, mortgage, car payment, etc.. if we ever needed it. So if something happened to DH or he were to lose his job, we would pull this money.
The other is a vacation account. It's kinda weird though... our upcoming Disney Vacation won't be paid for out of that vacaion account. It'll be paid for our of monthly income once the promo financing on the Disney Visa is up.
Our Vacation account is more of a secondary emergency account, I guess. And maybe eventually a really great vacation!!
We would touch it before the major emergency account, though.

 

[Shelly F - Ohio]

Our rule of thumb is to have enough money in the bank to cover 6 months of bills. So far we have saved $12,0000. We each have $50 a month taken from our pay so $100 a month goes into an account that we never touch. When we get our tax check we add a few hundred to the acct.