Hey there! 👋 If you’re reading this, it’s probably because you have an emergency fund and you’re wondering if you should borrow from it. The short answer is that it depends on your situation, but there are some general guidelines that you should follow to make sure you don’t sabotage your own financial stability. In this blog post, we’ll go through the do’s and don’ts of borrowing from your emergency fund, so you can make an informed decision. Let’s get started! 🚀

DO: Assess the Severity of the Emergency 🆘

Before you even think about borrowing from your emergency fund, you need to assess the severity of the situation. Is it a true emergency, like a medical bill or a car repair that you need to get to work? Or is it a “want” that you can live without, like a new pair of shoes or a weekend getaway? If it’s the latter, don’t borrow from your emergency fund. It’s only for true emergencies.

A cartoon of a person looking at their phone while thinking about an emergency with a question mark above their head

DON’T: Borrow More Than You Need 💸

If you do need to borrow from your emergency fund, make sure you only take out what you need. Don’t use this as an opportunity to splurge on something you’ve been eyeing. Remember, this money is for emergencies only.

A cartoon of a person holding a credit card and a bag of shopping with a crossed out tag that says "not an emergency"

DO: Create A Plan To Pay It Back 📝

When you do borrow from your emergency fund, make sure you have a plan to pay it back. This may mean cutting back on non-essential spending for a few weeks or months until you can replenish the fund. It’s essential to have a plan in place so you don’t dip into your emergency fund too often.

A cartoon of a person writing in a notebook with a dollar sign and an arrow pointing towards a piggy bank

DON’T: Ignore Your Emergency Fund ⚠️

If you do borrow from your emergency fund, don’t forget about it once you’ve paid it back. It’s important to continue to contribute to your emergency fund regularly so it’s there when you need it.

A cartoon of a person giving a thumbs up to a piggy bank labeled "emergency fund" while putting a coin into it

DO: Keep Your Emergency Fund Separate 🛡️

Lastly, make sure your emergency fund is separate from your other accounts. This helps you resist the urge to dip into it for non-emergency spending.

A cartoon of a person holding a shield labeled "emergency fund" and standing in front of other financial accounts labeled "savings" and "checking"

And that’s it! 🎉 Keep these do’s and don’ts in mind the next time you’re considering borrowing from your emergency fund. Remember, this money is there to help you through tough times, not to fund a shopping spree. Stay financially savvy and you’ll be on the right track to a healthy financial future.

An image of a piggy bank with a thumbs up and a "thank you" sign