10 Times It's OK to Raid Your Emergency Fund (and 5 Times It’s Not)

How do you know when you can raid your emergency fund? Find out the types of situations an emergency fund is built for and when it's better left alone.

10 Times It's OK to Raid Your Emergency Fund (and 5 Times It’s Not)
Updated May 13, 2024
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Whether you already have a healthy emergency fund or are working on building one up, it can be confusing to know when it’s OK to use the money you’ve been saving. Your emergency fund is one of many tools you can use to ease money anxiety, but its purpose is narrow in scope, as it’s only really meant for emergency situations.

Here we’ll discuss what an emergency fund is and give you examples of when it might be OK or not OK to raid your emergency fund. This will help you recognize the types of situations your emergency savings could best be used for.

In this article

What is an emergency fund?

An emergency fund is money you put aside in case of a financial emergency. This typically doesn’t include expenses you can plan for, as your fund is meant for unexpected events. It can be difficult to figure out how much money you need to save for unplanned expenses. But if you frequently add to your emergency savings, your emergency fund size will grow over time.

The 2020 Report on the Economic Well-Being of U.S. Households by the Federal Reserve found that nearly three in 10 American adults said they couldn’t cover three months’ worth of expenses by any means if they lost their primary source of income. To avoid this situation and plan for the unexpected, it’s best to start preparing now.

But if you’ve already started an emergency fund, how do you know when it’s OK to dip into your savings?

Let’s walk through some different situations in which it would be OK to raid your emergency fund and a few where it wouldn’t be. The main difference between these types of situations is that some are actual emergencies and others are not.

10 times it’s OK to raid your emergency fund

1. Unexpected job loss

If you’ve lost your job, you’ve likely lost your primary source of income. This is a huge disruption in your finances and something you couldn’t have planned for.

As such, it’s an unexpected event that may require using your emergency fund while you get back on your feet. Otherwise, you might not be able to cover the rent and utilities, buy groceries, or pay for other necessities.

2. Medical emergency

You can’t plan for a medical emergency, which could include becoming seriously ill or having some sort of injury. It might involve you, but it could also be a family member who’s having health issues. Medical bills can easily rise into the thousands of dollars.

If you use your emergency fund, you may be able to completely cover the cost or balance it out somewhat while you continue paying for everyday expenses using your income.

3. Emergency home repair

If the furnace goes out or a pipe bursts, it’s in your best interest to get these things repaired as quickly as possible. As far as homes go, you know your home’s systems and inner workings aren’t going to last forever. The issue is you don’t know exactly when an important piece of your home is going to stop working.

An emergency fund can help you be more prepared to pay for an emergency home repair.

4. Cut wages

Having your wages cut may not sound as bad as unexpectedly losing your job entirely, but you’ll still have to adjust your finances. In some cases, you might not be able to immediately cover all the expenses in your life without a financial buffer of some sort.

With a healthy emergency fund, you won’t need to scramble for additional resources. This counts as an emergency because it’s likely unexpected.

5. Emergency car repair

If you need your car for work or necessary parts of family life, you can’t have your vehicle out of commission for a long period of time.

Your emergency fund is designed to be used in situations that require emergency car repairs. This would most commonly apply to needing repairs because of a car accident or something unexpected happening with your vehicle, such as the electrical system malfunctioning or a similar event.

6. Sudden job relocation

You may not be able to control everything about your occupation, which could mean you have to relocate without much advance notice. Relocation expenses aren’t necessarily cheap, especially if you’re moving across the country or to an area that’s more expensive than where you currently live.

If this is an unexpected situation, it’s OK to use your emergency fund to pay for relocation costs.

7. Damage due to weather

The weather is unpredictable, even if you live in an area where certain types of weather conditions are more common. You might live along the coast and have done your due diligence in preparing for hurricanes. But that doesn’t mean you’re going to completely avoid weather-related damage to your property, including your home or vehicle.

You can’t plan for the weather, but you can financially prepare with an emergency fund.

8. Pet care

Similar to you or a family member having a medical emergency, your pet could also have a medical emergency. And the costs can also be similarly expensive. You know at some point every person and every pet will have medical issues, but you can’t plan for when and how much the cost will be.

Because these aren’t routine expenses, it’s OK to use your emergency fund to pay for emergency veterinary bills.

9. Essential travel

You could have to travel for an emergency, like seeing a sick family member or attending a funeral. The travel costs are unexpected and might not fit into your everyday budget. But an emergency fund can help offset the costs of this type of situation.

10. Phone repair or replacement

Fixing your phone or paying for a replacement wouldn’t typically fall under an emergency situation because many people don’t require their phone for work. But if your phone is necessary for your job, it’s a financial emergency for you to get it fixed or replaced. Otherwise, you wouldn’t be able to comply with your job responsibilities.

5 times it’s not OK to raid your emergency fund

Now, what about the times when it’s not as great of an idea to raid the emergency fund? These situations might feel important, but that doesn’t mean they’re critical. Our emotions can sometimes make that hard to sort through, though, so let’s take a look at a few situations that are less likely to qualify as an emergency.

1. Holiday/gift shopping

Christmas, birthdays, and other special occasions typically happen at the same time every year. This means you can plan ahead for expenses involved with these days.

These types of situations, where you want to go shopping for gifts, wouldn’t fall into an emergency category. Because they’re not unexpected, you shouldn’t use your emergency fund for these expenses.

2. Vacation

Vacations aren’t unexpected or included as emergencies. In almost every case, you have to plan something if you’re about to take a trip, whether it’s buying your flights, hotel stays, rental car, or any other number of things.

Taking a vacation may be important, but you can often plan for it well in advance. Because you can plan for it, it makes sense to dedicate a savings goal, separate from your emergency fund, for your trip expenses.

3. Routine expenses

Anything you can plan for is a routine expense. This includes your monthly rent or mortgage, car insurance, car registration, buying groceries, and annual checkups with your doctor and dentist.

These types of expenses are expected, so you should already include them in your everyday budget. This way you already know what you’ll be paying ahead of time so you won’t spend more than your budget allows and have to use your emergency fund.

4. Technology upgrade

It can be tempting to always get the latest piece of technology, including a new phone, TV, tablet, or gaming console. But if these devices aren’t necessary for your continued income, there’s no reason to use your emergency fund on them.

This doesn’t mean you can’t have savings goals for things you want. So if you want to upgrade your phone, set a savings goal for yourself and consistently work toward achieving that goal.

5. Sales or discounts

Maybe your favorite store announces a sale out of the blue or there’s a big discount on an item you’ve been wanting to purchase. If you don’t have money in your budget to take advantage of a sale or discount, your emergency fund might seem like the perfect solution.

But it shouldn’t be. Your emergency fund isn’t meant for purchases that aren’t related to an emergency situation. It can feel disappointing to miss out on a sale or discount, but passing on them can help you retain the funds you need for something unexpected down the road.

How to replenish your emergency fund

If you’ve used your emergency fund in an emergency situation, it’s time to start building it back up. Here are a few ways you can help replenish your emergency fund:

  • Learn how to budget. When you apply the principles of budgeting in your life, like tracking your expenses and spending, it’s easier to figure out how to manage your money. Budgeting can help you cut out unnecessary expenses so you have more money to put into your emergency fund.
  • Use the best budgeting apps. If you feel like you need help sticking to your budget, consider using budgeting apps. These apps can help you hit savings goals, including rebuilding your emergency fund. They can also help you track your expenses and cut down on expensive bills.
  • Make sure your fund is in one of the best savings accounts. Storing your emergency fund in one of the best savings accounts can help grow your savings over time. These accounts typically accrue interest, which is added to the overall account balance.
  • Start a side hustle. Starting a side hustle can provide you with the extra money you need to replenish your emergency fund. Choose from the best side hustles to jumpstart your savings today.
  • Use rewards credit cards. The best rewards credit cards offer valuable cash back, points, or miles on every purchase you make. Use these rewards for everyday purchases or planned expenses and put the money you save into your emergency fund.


What would qualify as a good reason to use your emergency fund?

Any necessary and unexpected expense would typically qualify as a good reason to use your emergency fund. This could include keeping up with everyday expenses if you lose your job, having to pay for a medical emergency, or paying for emergency home repairs.

Unnecessary or routine expenses wouldn’t count as good reasons to use your emergency fund. This could include holiday shopping, taking a vacation, or paying for a routine medical exam.

How much should I put in my emergency fund per month?

The amount you should put into your emergency fund per month depends on your financial situation and what you can afford to put away. It often makes sense to have enough money saved in your emergency fund to get by for three or more months if you were to lose your primary source of income.

To reach this goal as quickly as possible, it’s best to put away as much as you can according to your budget. If that’s $100, $50, or $20 per month, then that’s what you start with. Be sure to adjust your contributions if your financial situation changes, whether that means putting away more or less money each month.

Should I use my emergency fund to pay off debt?

Emergency funds are designed to help in case of a financial emergency. This means you likely shouldn’t use your emergency fund as a way to get out of debt. If you use your emergency fund to pay off debt and no longer have savings, how will you cover a medical emergency, emergency car repairs, or everyday expenses if you were to lose your job?

This could cause you to get into more debt and fall into a continuous cycle of debt. Working your existing debt into your budget and preserving your emergency fund for an actual emergency is likely the better option in this scenario.

Bottom line

Your emergency fund is there in case of a financial crisis. This could include a variety of situations, but wouldn’t typically involve everyday or planned expenses. Keep in mind that the quicker you start an emergency fund, the quicker you can reach a healthy level of savings. Even if you have to start with small amounts, it’s better to start than to leave it off.

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Author Details

Ben Walker, CEPF, CFEI®

Ben Walker, CEPF, CFEI®, is credit cards specialist. For over a decade, he's leveraged credit card points and miles to travel the world. His expertise extends to other areas of personal finance — including loans, insurance, investing, and real estate — and you can find his insights on The Washington Post, Debt.com, Yahoo! Finance, and Fox Business.