In pursuit of financial independence and personal fulfillment

Why have an emergency fund? So you won’t have an emergency

I just had an unexpected expense that would put almost half of Americans into a tight spot financially.A car repair — or rather several car repairs — have me a little peeved this week. However, considering 44% of Americans can’t cover an unexpected $400 expense without borrowing money or selling something, being a little peeved isn’t really a big deal.

This is part of why I save. It’s why everyone should have an emergency fund. It’s why you should budget for things that you don’t see coming but recognize can.

I won’t bore you with all the details of the car repair. The basics are that the alternator in one car went bad. One mechanic replaced it for $250. Four days later, the car died again about an hour away. A mechanic there said the new alternator was bad. That replacement cost $460.

I’ll get a refund for the shoddy alternator (although not the labor) and get about $150 back, but that’s still $560.

To make matters worse, the day before the car with the second new alternator was ready to be picked up, another car experienced a similar problem.

This time it turns out it’s not the alternator, but the computer that’s gone bad. It stopped sending a signal to the starter. Cost of repair: $500.

That’s just over $1,000 I didn’t plan to spend, for those keeping score.

The moral of the story

Confucius say: A fool with a car and his money are soon separated.

I don’t suspect that was an actual Confucius quote. Maybe Lincoln? Or Einstein. Could be Edison. Possibly Maya Angelou. Everything they said was basically made for the Internet.

No, the real wisdom here is that this is an annoyance, not an emergency, because I set aside money for exactly this reason. It won’t affect whether I go to the grocery store, or put money in an IRA, or pay my mortgage or my credit card in full this month.

It was money I could have used to go to the movies three months ago, or buy a not-quite-yet-needed new pair of shoes last month. It could have been sushi and drinks, or a new cell phone. Instead of being any of those things, this money is an alternator, a computer and labor from three mechanics.

What it isn’t is a real emergency.

And for that, I can’t even really get all that annoyed.


  1. Dave @ Married with Money

    That stat always scares me about not being able to cover a relatively nominal, albeit unexpected, expense. An annoyance is bound to happen when you have an issue like that, but you have an emergency fund as your own little insurance policy so that accidents and unexpected expenses don’t put your life on pause. 🙂

    • I Dream of FIRE

      It kind of blows my mind that so many people are on such shaky ground. I try to remember that I’m in a much better position than a lot of people, but that wasn’t necessarily always the case. I wish I had better (digital) records of my spending right out of college so I could see how I’ve progressed. I guess I could dig through my old check registers and get some idea. I’d like to know at what point I moved firmly beyond living paycheck to paycheck. Maybe I’m romanticizing my money past 🙂

  2. Mrs. Adventure Rich

    Yes! Our emergency fund is our security blanket and has helped when we have unexpected expenses. Here’s to keeping a bit of savings so emergencies aren’t emergencies!

    • I Dream of FIRE

      I much prefer non-emergency emergencies 🙂

  3. Kristine @ Frugasaurus

    Absolutely! When I first started out in this new job, we had no emergency fund but plans to establish it ASAP. Suffice to say, Murphy striked us with an emergency before said emergency fund had been properly established. We got through it, but it was a tight couple of months. It feels so much better for us both to know that we now have a solid and established emergency fund that will cover us if the same thing happens again and more!

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