How To Replenish Your Emergency Fund After An Emergency


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Last Saturday I was on the way to meet my friend for our Saturday morning run when suddenly my car was making an odd sound. I knew right away it was a tire issue. Luckily I wasn’t more than a block from my destination.

How to replenish your emergnecy fund after an emergency

The unlucky thing was that my tire was completely ruined, and when my husband took it to the tire store they told him that in their opinion all 4 tires needed replacing before another mid-west winter hits.

My husband went out to inspect the tires one more time before he gave the tire store permission to switch tires and he agreed–we needed new tires.

Truthfully, this was an emergency that could have been avoided if we had taken the time to take a good look at my tires months ago and realized they needed replacing soon and started putting money away–live and learn.

Since we didn’t think ahead this expense became an emergency expense. Thankfully, almost 15 years ago we started a $1,000 emergency fund that we can touch for such things–and so a few hours after my tire blew I had a set of 4 brand new tires paid in cash.

However that now means that the $1,000 emergency fund needs to be topped up again–which got me thinking–you see a lot of articles around the web on how to build an emergency fund, but not that many on how to replenish one.

How To Replenish An Emergency Fund

1. Always live below your means

If you want to live on a cash budget, the only way to make it work is to live below your means so that you have some wiggle room in your budget each month. Use this wiggle room money to rebuild your emergency fund.

Living below your means for our family means no cable, inexpensive pay-as-you-go cell phone service, saving money in simple ways on our groceries, knowing the least expensive ways to buy clothes, and not moving up to a better home when we became debt free.

What living below your means for your family may look different and that is okay, the key is to remember not to commit 100% of your finances to set, “got to pay or they will cut it off or take it away,” expenses.

How our family has done this is to live within my husband’s base pay as much as possible and use our other sources of income to pay for the “flexible, could live without it” expenses such as eating out, spending money, and such.

2. Stop all other short term financial goals

This is what we do to refill our emergency fund. Typically after I take out the money needed to meet our bare bones budget I put any money left over into funding our short term financial goals–however if the $1,000 emergency fund has been touched since the last time we got paid, I top it up first before moving on to our short term goals.

Often this means we don’t fund our short term goals with any regularity as emergencies keep popping up–other times the small emergency fund sits untouched for months and we are able to make great progress with our short term goals.

3. Use windfalls to restock or the emergency fund

Most years we get an income tax refund. Some years my husband gets a holiday bonus. In some seasons as an RN my husband gets a lot of overtime and call in shifts. These are examples of what I like to call financial windfalls. We use these to restock our emergency fund if needed.

4. Money made from reselling items

The year we moved from one home to another we had a big yard sale and Craigslist blitz weekend. If our $1,000 emergency fund had been under stocked at that time I would have used the money to replenish it .

5. Overstock The Emergency Fund When You Sense An Expense Coming

Sometimes I will bump the $1000 fund up to $1,500 using the first 4 points above–why? Well, it is because truly a lot of every day emergencies are simply repairing things that are wearing out. I should have done this for the tires but as I said above –live and learn.

In the past I did this when we had older cars that called for frequent repair. I have also done it when I realize an appliance is making a funny noise. Since I have been a homeowner for almost 20 years I know that noises from appliances usually mean either a repair or a replacement cost is coming.

6. Increase your monthly income

If it is taking you months and months to replenish a $1,000 emergency fund you might need a bigger shovel–as in more income. Living thrifty can only take you so far financially.

For our family this has meant my husband holding 2 jobs most of our married life. Even now that we are debt free he still holds a second job although it isn’t as time consuming as ones he held before we were debt free.

I do what I can from home to help the family out financially. I have at all times worked at keeping our expenses to a minimum but I have also earned money for our family. Right now the income I add comes from blogging, but in the past I have sold on eBay, ran a licensed family daycare, and delivered newspapers.

7. As Soon As Financially Possible Create A Larger, Second Emergency Fund

In this article I have been referring to a very small emergency fund of just $1,000 to $1,500. I know this is probably going to sound crazy to those of you who worked so hard just to put $1,000 to $1,500 together to make an emergency fund, but I honestly think every family can benefit financially from keeping either 2 types of emergency funds or one large one.

Here are the 2 types of emergency funds our family has to stay debt free…

Short term – $1,000 to $1,500 kept in a way that you have to think about it before accessing it, but it still is fairly easy to access.

Long term – 3 months worth of income (enough to cover bare bone budget only) kept in an account that requires a lot of effort to access, as in an account with no cards, no online access, no checkbook–you have to go to bank during banking hours to access it.

We lived for years without a long term emergency fund but when we became debt free we went through a painful lesson (and one where we made stupid, panic filled decisions) that showed us that to stay debt free we needed to make the 3 to 6 month emergency fund that all financial experts talk about a reality (yep those experts really do know what they are talking about).

We choose not to combine the two funds into one  because we have made the bulk of the money so hard to touch that when emergencies that had to be taken care of immediately came up we were having problems getting to the money in a timely manner.

For instance, the tire blew up on a Saturday morning. If we had just the one large emergency fund we would have had to wait until the bank opened Monday morning to fix the problem. However, with the $1000 fairly easy to access we were able to take care of it right then and there.

This 2 teared system isn’t for everyone but it works great for us.

psst…I do not consider myself a financial expert. I am simply an individual learning more and more on how to steward money wisely and I do that learning mainly through reading great books on handling finances including:

Have you replenished your emergency fund in a way I haven’t mentioned? If so I would love to hear about it in the comments below.

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  1. Every windfall, every increase in pay goes straight into the emergency fund until fully funded. And if you have more than one income, try to live on 1-1/2. I would say just one, but with toda’s costs I don’t think that is possible.

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