If You Can't Grow Your Emergency Fund - You're Doing It Right.

[james.hendrickson]

Late last year I really wanted to grow my emergency fund - which only had a couple of hundred dollars in it. Every time I would shovel more money into it, something came up that was not in our budget. For example, we went to Hawaii and our car got towed because we parked in a no parking zone. So, pretty much our savings haven't grown as I would have liked. But that said, I realize that our situation would have been a lot worse if we hadn't kept cash in the emergency fund. So, if you're in the same situation - you're doing saving right. Don't worry and just keep working at it.

[disneysteve]

I kind of see the point you're trying to make here. Yes, the goal of having an EF is so that you have money set aside for unexpected expenses. However, if you are continuously burning through your EF, you need to reevaluate your budget because there are clearly things you are leaving out of your plans.

Most things that people call emergencies are really just a result of poor planning. Your example of the car being towed is a perfect one. That shouldn't have been an emergency as it was 100% avoidable. You chose to park there knowing it was illegal. The same goes for routine car repairs. You shouldn't have to hit your EF for new tires or brakes. If you have a car, you should be setting money aside for routine maintenance. Or if you own your home, you should be saving for maintenance and repairs. Now if a tree falls on the garage, that's an EF sort of thing, but not something predictable like the 20 year old refrigerator dying.

Still, your post is true. It's much better to have that unexpected bill pop up when you have savings to cover it even if that takes you back to zero and you need to start building it back up again.

[Jluke]

You lost me at “vacation in Hawaii”

[disneysteve]

You lost me at “vacation in Hawaii”

Yeah, I was going to jump on that also. Obviously, if you don't have a solid financial plan in place including an adequate emergency fund, taking a luxury vacation probably isn't the best idea in the world.

[scfr]

You lost me at “vacation in Hawaii”

James said he went to Hawaii; he did not say that it was a vacation.
It might have been a business-related trip or to attend a funeral or visit family or any other number of reasons other than vacation.

James - Is it possible to increase your EF contributions so that it will have a better chance to grow to the level you want.

[james.hendrickson]

Thanks SCFR - should have clarified. Yeah we made it out to Hawaii on miles and stayed with relatives. We did spend some money on food and transportation, but it wasn't a 5 star luxury trip by any means.

[disneysteve]

Thanks SCFR - should have clarified. Yeah we made it out to Hawaii on miles and stayed with relatives. We did spend some money on food and transportation, but it wasn't a 5 star luxury trip by any means.

My apologies. I shouldn't have assumed otherwise. Good for you for finding an inexpensive way to take a nice trip.