Nov 20

The First Time I Needed My Emergency Fund

emergencyfundIs your emergency fund a topic of dinnertime conversation? At my house it is. Yesterday the bf and I had an interesting conversation about emergency funds. As you might remember, the bf and I lost our car to flooding during hurricane Sandy, and had to use money from our respective emergency funds to buy a new one. While bf has always been a pretty prudent saver (since I’ve known him at least), I’m far more cautious and conservative when it comes to emergency fund savings. Bf would probably be fine with having 3 months’ worth of expenses in his emergency fund (we save separately since we’re not married), but I insist on having at least 6-9 months’ worth of expenses (or more) in mine.

Why? Well, because I’ve had emergencies in the past, and frankly they freaked me out!

I guess you can say that I’ve always been pretty risk adverse nervous when it comes to money. I suspect growing up an only child to a single mother probably contributes to my desire to be financially secure as an adult. While I never wanted for anything as a child (except for a pony, but I suspect that’s normal across many socioeconomic statuses), I certainly recognize as an adult, that my parents’ divorce put my mother in a precarious financial situation. An amazingly stoic woman, she never complained about how hard it was to work a full-time job and raise a child by herself.

Year later I realize how lucky we were never to experience a severe financial emergency. Having worked in a homeless shelter for 3 years, I’ve seen how easy it is for “normal” people to fall on hard times and lose everything. It’s a sad, scary situation, that I don’t ever want to experience. That fear (rational or not-I know my family would take me in before I ended up in a shelter) is always in the back of my head and keeps me motivated to continue saving aggressively.

My First “Emergency”


My 2nd car looked just like this, but was more of a teal green

Since I moved out on my own at age 18, I’ve been pretty financially independent. My folks couldn’t afford to pay for college, so I attended a private university that gave me a good sized scholarship. I also worked a bunch of part-time jobs. I had my first real “emergency” when I was 21. At the time, I was driving back to school from Maine in my 1994 teal green Chevy Cavalier (a hand me down from my grandparents). I was on 93 in the middle of Boston rush hour traffic, when I saw the caution light come on. I immediately started to panic becasue I was hours away from home and hours away from school. I pulled the car into the first exit I saw and coasted into a gas station parking lot. As steam started coming from my hood I jumped out of the car. At the time I thought the steam was smoke and I didn’t want to catch on fire (silly, but I was scared). A friendly older gentleman who was filling up his tank at the service station came over to take a look at what was going on. I’m sure he saw the terror on my face and wanted to help me out. Instead he muttered something that sounded like, “Oh that’s not good” and suggested that I call my parents to pick me up. The only problem? They were 5 hours away!

Long story, very condensed, I called AAA and had the car towed to a local dealer. The dealer declared the car a total loss and towed it to the junkyard. As I left the dealer I began to cry. I needed a car to get to work and school and I didn’t want to deplete my emergency fund to buy a new one. But you know what? That’s what an emergency fund is for. Thankfully, when my “emergency” came, it was only an inconvenience because I had the money to buy another car.

Do you remember your first financial emergency? Did you have an emergency fund?

Image: Mulad and Stockmonkeys.com


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  1. Alicia @ Financial Diffraction

    Somehow I’ve never had a true “emergency”, thankfully. Even before I had an Emergency Fund. Even still, I see the value of having one – since I just admitted to never have a true emergency yet, I know I have just jinxed myself.

    1. KK

      That’s definitely a good thing. Knock on wood that no emergencies are coming your way 😉

  2. Kali @ CommonSenseMillennial

    Thankfully – and knock on wood! – I’ve not had a real emergency that required the use of my emergency fund yet. The closest we came was when the furnace in our house went out last winter, but the realtor who we worked with to buy the house had given us a gift of a 1 year home warranty. The furnace was mostly covered – instead of being something like $3500 to replace, we only paid $900 out of pocket. We had to strap down our budget for the next two months to make up for it, but that allowed us to handle the situation without dipping into our emergency fund.

    1. KK

      Oh wow, that could have been a pretty bad situation. I’m glad you had that warranty. $900 is much nicer than $3500!

  3. Anne @ Unique Gifter

    I’m going to keep my finger’s crossed on this one. We had to replace a car last year, but it wasn’t immediately critical and we had a lot of access to appropriate financing.

    1. KK

      Cars are such a pain in the butt. Most people need them, but they always break down at some point or another, and usually during the worst times.

  4. E.M.

    Oh wow that is terrifying! I would never want to hear that my car suddenly died in the middle of a trip like that. Yikes! I haven’t really had to use my emergency fund yet. My dentist visit was the first unexpected expense I’ve had, but it was a small amount. My parents struggled with money, too, which is why I worry about things happening.

    1. KK

      With all of the new medical stuff and managed care things that are happening, I’m pretty nervous about getting sick. I thankfully have good insurance, but I still wouldn’t want to pay out the whole deductible at once if I got sick (I could but I wouldn’t be happy about it). I think when you see your parents struggle it sort of ingrains something in you to be more nervous or watchful with money.

      1. Ryan Hart

        You bring up another great reason to have an emergency fund – to pay your health insurance deductible!

  5. Dear Debt

    Yep, my first Emergency was a car accident I recently wrote about at 22. $1800 just gone. I was really glad i had it, as I didn’t have a credit card at the time. If I was living in NYC (and when I was), I also had a large EF. Now that I am in Portland and the cost of living is so much cheaper, and I know a little extra hustling can go a long way, I’m really trying to throw most everything towards debt.

    1. KK

      Cost of living is definitely something to consider when thinking about emergency funds. If you live somewhere less expensive and don’t need your whole paycheck just to survive, you can easily cash flow small emergencies in a way you might not be able to in a more expensive city.

  6. Morgaine

    The only real emergency that I’ve had as an adult (was hit by a car on my first day of high school!) was losing my job. I had a super small EF at the time (but bigger than now, since its at zero) but it carried me through until I could have gotten employment insurance or what ended up happening, land another job. My main problem is not saving for the little things and then my budget gets blown out of whack and I have to use credit as a band-aid. I really want to ramp up my savings next year to prevent this and to prevent using credit if I have an emergency situation (knock on wood!)

    1. KK

      Oh man, being hit by a car is a horrible emergency! I totally hear you on how difficult it can be to get that initial e-fund going. It’s hard to save because you don’t have enough money and then you don’t have enough money when there’s an emergency because you spent all your money trying to stay afloat. Kind of a bad catch-22. I know you’re going to do great next year!

  7. Emily @ evolvingPF

    We haven’t had an emergency yet but even if we had one I think I’d be reluctant to label it as one because I don’t want to admit that emergencies can happen to us, you know? If our car blew up we’d draw money from our Cars savings account and call it an eventuality, but that could easily be labeled an emergency if we had the money in our EF instead of divided up into Cars, Medical, etc.

    1. KK

      Emergency? What emergency 😉 Nobody ever wants to think it’s going to happen to them, I guess that’s why it’s an emergency. Thankfully when you have the money to buy what you need or fix what you need, the emergency doesn’t feel as scary.

  8. Money Beagle

    Not to jinx myself but I have yet to use it. I’m hoping to keep it that way. One way we get to this level is by having allocations for specific things, so for example we have a car repair fund that pays for stuff that comes up with the cars. Now if it were something catastrophic where the fund got drained, that’s where the emergency fund would come into play. So, I guess having the emergency fund as a second line of defense is our strategy.

    1. KK

      That’s a very good thing (fingers crossed that you don’t have one). That’s smart what you do with the allocations. If you have money saved for your car and then your car dies or needs to be fixed it’s not a big deal because you have the money to make the repairs.

  9. Andrew@LivingRichCheaply

    So how did you end up getting home? I had some car trouble too and had to tap into my emergency fund. It was one week before my wedding and I was driving to pay one of the vendors. My car just shut down on the highway and I called AAA…they towed me to a mechanic. I work about 40 miles away from home so took the train home. The mechanic tells me the repair would cost a little over $1000. I thought he was gouging me with the price, but what was I going to do. Even if I towed my car to another mechanic, it would cost me to tow it and the first mechanic was charging me a “diagnostic fee” Luckily I did have an emergency fund and paid for the repair…got my car back. It was a hectic week…that’s for sure.

    1. KK

      Thankfully I had a few friends going to school in Boston at the time so I called one of them and he picked me up and brought me to the bus station. It was a pretty long and miserable day. Probably not as miserable as breaking down during your wedding week when you’re trying to get everything planned and sorted out :-(

  10. Mackenzie

    Hmmm, my first emergency was related to my car as well. Those darn things! 😉

    1. KK

      I feel like I have bad luck with cars. My first car had weird electric problems and randomly turned off (once on a 2 lane bridge the week I got my license, omg I thought I was going to die), my second car died in rush hour traffic after overheating. Bf’s jeep was ruined in Hurricane Sandy, and our current SUV was just keyed (although it still drives fine-knock on wood).

  11. Stephanie @ Six Figures Under

    When I was in college the transmission on my car (which I got free from my grandma) went out. It cost $2400 to rebuild it. I was responsible with my money, but nearly lived paycheck to paycheck. I put the repair on my credit card. It was first time I couldn’t pay the entire balance. Thankfully I didn’t make that a habit. After a couple months, I paid it off.

    1. KK

      Ouch that’s a huge bill when you’re living paycheck to paycheck (and I suspect many people in college are, unless mom and dad are footing the bill). Good for you for paying it off and never going “back”

  12. anna

    Glad to hear that you were okay at least despite the car troubles. My first emergency situation was also due to my car (though I was pretty reckless as I didn’t get it maintained save for oil changes) – it received an overhaul, so I think that’s why I’m still so partial to it since I paid a lot of money upfront to get it fixed. Well, that and because I dread the thought of car payments, so just going to do my best to save up for the next one!

    1. KK

      Emotionally distraught, but totally fine. I also dread the thought of car payments. After years of student loan payments, monthly payments make me cringe. Bf and I were going to drive the jeep until it died. Sadly it died a sudden and watery death.

  13. Rebecca

    That would be a scary occurrence and all around bad. My car has had to be towed three times-one for an engine, one for a flat and the other for a timing belt. I wouldn’t call them real emergencies though since I was never more than 30 minutes from home when they happened.

    1. KK

      At least you were close to home, but that still totally stinks to have to have your car towed so many times. Towing is way more expensive then I thought it would be. Thankfully I had AAA at the time.

  14. Budget and the Beach

    That sucks you didn’t get a pony! :) Why do cars seem to be 99% of all emergencies? Mine too! I’m too old to remember my first emergency though.

    1. KK

      I wanted a pony and a puppy, I got the puppy eventually! Cars are real pain. I think everyone had had one break down at some point or another and when they break down it’s never cheap.

  15. Broke Millennial

    Your car situation is one of my worst nightmares! I had to dip into my fund for a car related expense too, but it was about 6 weeks after getting my brand new car. I rear-ended another vehicle and had to get a whole new bumper. Luckily, the woman I ran into was about to scrap her car anyway and never even filed an insurance claim.

    1. KK

      Ugg, that totally stinks. At least there’s some luck in the story. You didn’t get a brand new range rover or someone who wanted to sue you. I guess there’s some sort of bright side in there 😉

  16. Demaish @ Borrowed Cents

    My first emergency is when I did not have money for tuition and I could not register for classes. Back then I did not qualify to apply for student loans. I had to get a pay day loan just to be able to register for classes since I had no savings

    1. KK

      Oh man, that’s rough. Pay day loans to go to school sounds like my worst nightmare.

  17. FI Fighter

    Thanks for sharing, and a good reminder on why we need to have funds readily available. I should make note of this as I often like to live on the edge… I’ve been getting to the point where I’m even borrowing the security deposit from one of my tenants to cover expenses. Probably not a good habit to be practicing!

    1. KK

      You need to save a little more and I need to spend a little more maybe 😉 Sometimes I think I need to be a little more relaxed (it would probably be good for me to live a little more on the edge).

  18. DC @ Young Adult Money

    Both my wife and I have had some big car problems resulting in a bill close to $1k. Those emergencies are really disappointing because it’s $1k! Seems like so much money to lose to a car repair, yet it’s so necessary. I need to keep building my emergency fund so the sting isn’t quite as bad next time.

    1. KK

      Car repairs always stink (especially when they’re unexpected) but you’re absolutely right, it’s not as bad when you have the money to pay for the repairs and you don’t have to beg and borrow to get the money you need.

  19. Connie @ Savvy With Saving

    Luckily, I haven’t had any real emergencies yet (aside from ones that cost a couple hundred so not so bad). I’ve heard a lot of stories of how people have depleted their emergency funds because of car accidents. Luckily, I don’t drive! :)

    1. KK

      I love to drive, but I certainly would like to not have the expense (especially on days like that one).

  20. Edgar @ Degrees and Debt

    I know that traffic on 93 very well :) god I love Boston

    1. KK

      Good times… :-)

  21. Kyle | Rather-Be-Shopping.com

    The worst part about an emergency funds is having to use emergency funds. But I sleep so much better at night knowing that we are covered if the car craps out or if the washing machine stops cleaning the ridiculous amount of dirty laundry that rolls through my house.

    1. KK

      Exactly. And the best part is not going into debt to make car repairs or buy a new washer 😉

  22. Brian

    We once had a house fire, started by roofers torching the roof. The suite was unlivable in and the mattress and various computer things destroyed. Thankfully we had an emergency fund on hand to deal with the situation and ended up saving money in the end as the rental company put us up in a hotel for the next month and a half and we didn’t have to pay rent! I’d still rather have had the house to live in…

  23. Tara @ Streets Ahead Living

    We have the emergency savings mostly for unemployment preparation now, especially since our car is really not a necessity and if we have a serious repair need, we’ll just scrap it. My husband has been umployed for three months twice in the past 3.5 years so it’s always best to prepare, especially if you’re in a career that can be hit with dry spells.

  24. Martin

    I just got across your blog and read the story. It was a very nice story although probably at that time it was scary and demotivating. But I am glad seeing a young person (at that time) taking life responsibly and trying to take care of herself. In today’s world it is a rare appearance I guess. Hopefully your story will be inspirational to other new savers and young people who are just starting and realizing that it is a lot better when you are self-reliable.

  25. Angela

    I try to save for a few months to cover my student loan payments. I calculated it, and I have enough savings to teach in Thailand with a small income, along with pay monthly rent in the States and my college loans for a year. I actually never thought of my savings as an emergency fund, but after reading your article, it made me realize that I have a decent savings for a rainy day.

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