When Is It Okay to Use Your Emergency Savings?

It’s common knowledge that an emergency fund is an essential element of financial health. You may already know that conventional wisdom recommends stashing at least three to six months’ worth of living expenses in your emergency savings account. But what, exactly, should your emergency savings be used for and when is it okay to dip into the fund? Job Loss Job loss is one of the most common scenarios in which a person might tap into their emergency fund. Whether you were fired or laid off, you can use your emergency fund to tide you over until you start bringing in paychecks again. However, during this time, it’s also best to cut expenses so that you can use as little of your emergency cash as possible. Remember that every dollar you spend from your emergency savings, you’ll have to replace later. Medical Catastrophes Predictable medical expenses should be covered out of your regular living expenses. These include the cost of vaccines, medication co-pays, and doctor visit co-pays. However, if you or a loved one suffers a major medical problem, it’s perfectly okay to dip into your savings—that’s what it’s there for. Urgent Repairs Every driver knows that eventually, their tires will need to be replaced and they’ll have to pay for a registration renewal. These predictable expenses should be paid for with one’s regular checking account. However, if the car needs an urgent, unforeseen repair, it’s okay to fix it with your emergency savings, since you’ll need your car to get to work. The same applies to your home. It’s best to save up for the repair or replacement of major appliances, since you already know they’re going to fail eventually. However, if something unexpected happens that urgently needs to be addressed, it’s okay to use your emergency savings. If you’re looking for savings accounts with great rates, check out Alpine Bank in Steamboat Springs, CO. This bank also offers youth savings, money market, and health savings accounts (HSAs). You can reach their office at (970) 871-1901 to inquire about their current rates.