Genius – How To Figure Out If You Should Really Have An Emergency Fund

Emergency – what thoughts do these words conjure up in your mind?

  • Health and well-being issues
  • Boiler breakdown
  • Car repairs
  • Life crises

Whatever it is I am certain just the thought sends shivers down your spine. Infact, you probably don’t even want to think about it. Yet most finance gurus encourage us to have an emergency fund. They cushion you through those unexpected situations especially  if you don’t want to dip into your savings pot. It’s certainly better than having to borrow. I agree. But I disagree with the concept of calling it an emergency fund.

 Infact, I scrapped “emergency fund” from my learned words.


We will get to that but, first, let’s talk about what causes or qualifies something to be an emergency in the first place and what can be done to minimise or eliminate these situations. What is an emergency?

According to Google an emergency is defined as “a serious, unexpected, and often dangerous situation requiring immediate action.”

Someone once said that important things are rarely urgent but postponing important things can turn them into urgent things or emergencies.  For example:

  1. You choose an unhealthy diet and one day your heart decides it’s suffered enough abuse and ceases to function.
  2. Your boiler breaks down. But of course it’s not your fault except you neglected to take out insurance on it or you preferred spending money on nights out rather than a new boiler. Now it’s an emergency.
  3. You see the red light flashing in your car but you ignore it. Then on a cold winter’s day your car stops in the middle of the motorway.
  4. You leave the heating and the lights on even when it is not necessary and when the bill comes you have insufficient funds to cover it. And if you don’t pay it your services risk being terminated. Now you have an emergency.

You get the idea.

The most distressing thing is that these emergencies tend to happen at the most inopportune time.

So I have a proposal and here’s the reason why I scrapped “emergency fund” from my learned words. In my life experience and observations it seems that labeling a fund “emergency” seems to attract emergencies.  How about we start using a different vocabulary which is more empowering and puts us in control? Why not have an “Improvements and Upgrades Fund” instead? 

What are your views on Emergency Funds?  Please share your thoughts in the comments section below. I’d love to hear from you!

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