Dave Says…Hands off the Emergency Fund!

Dear Dave,

Sometimes our budget gets busted because of home improvements and various other things. I think we should take money from our emergency fund when this happens, but my wife says it should come out of our restaurant or fun money. What’s your opinion?

Josh

Dear Josh,

Overspending isn’t an emergency. If you budget a set amount in one category, and you go over that amount, you’ve got to reduce something in another area to stay within your budget for the month.

If something happens on a pretty regular basis, it’s not an emergency, it’s a predictable event. That means you need to budget a larger amount for home improvements or whatever the problem area may be.

On a month-to-month basis, if you have $200 budgeted for household repairs, and any work turns out to be $300, I’d rather you cut back on eating out or another non-essential category to make up the difference.

Your wife is right on this one!

—Dave