What happens when the day finally comes that you use the emergency fund you’ve been working so hard to build? Here are five eye-opening, sometimes uncomfortable realities you only learn after actually using your emergency fund and the lessons you’ll (hopefully) learn from them.
Surprise Costs Pile Up Fast
Emergencies don’t politely wait for your bank account to catch up. It’s possible and even probable that you could experience an onslaught of surprise expenses.
Hopefully, you can avoid this, but there’s no way you can most of the time; it’s just life teaching you to expect the unexpected, and to make fast but smart moves to keep your bills from spiraling out of control.
There Are Weak Spots in Your Financial Planning on Full Display
Using your emergency funds will have you question whether you really had your act together. You might wonder why you didn’t have better insurance or a more thorough budget. You’ll curse yourself for not putting enough aside each month and seeing your emergency fund as an afterthought.
As long as you don’t let these realizations drag you down, this is a good thing. Yes, it’s a harsh spotlight, but one that means you can finally see.
You Grow a Financial Backbone
That leads us to the next hard truth: you’ll adopt a one-bitten, twice-shy mentality around your savings that can empower you to make smarter decisions. You learn to spot red flags, cut out dumb purchases, and say “no” to stuff you don’t need.
It’s unfortunate how experience teaches you things, but you’ll be grateful that you know better now, so you can do better. No more feeling bad about suggesting a walk with a friend instead of drinks to help put more money aside; you’ll have real life to thank for a healthier fund the next time you need it.
How Much You Save Matters More Than You Think
You’ve probably read the “three to six months of living expenses” estimate for emergency funds and scoffed. Who can realistically save that amount? There’s no denying it can be challenging, especially when you don’t always have the luxury of time to build that amount before you need to use it.
But honestly, even that might not be enough if life really decides to go off the rails. You’ll learn that not only should you be more giving to your emergency fund, but you’ll also calculate your real bare minimum to help you get by on whatever amount you do have.
You Get Real About What’s Actually an “Emergency”
Your priorities come into focus when you’ve spent them on surprise expenses. You’ll question your decision: “Was this worth dipping into my emergency fund for?” The answer isn’t the point; it’s good that you’re auditing your financial decisions.
It’s challenging to think clearly in emergencies, so don’t beat yourself up if you’re realizing in the cold light of day that you could have waited it out. Yet it’s equally important to be real with yourself and notice the difference between a calculated use of this cash or something that could have used another angle.
