What kind of real life emergencies have used up your EF?

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Post Reply
Topic Author
runnergirl
Posts: 131
Joined: Thu Nov 04, 2010 1:15 pm

What kind of real life emergencies have used up your EF?

Post by runnergirl »

I am trying to figure out what sum of money to put in my emergency fund for unforeseen events. Many of the foreseeable events, such as medical bills and unemployment, can be planned for due to insurance and severance pay, and the occasional need for a new car or home repair can be reasonably budgeted for. What kind of unforeseen and costly events have you actually encountered?
wwross
Posts: 24
Joined: Fri Sep 10, 2010 3:43 pm

Re: What kind of real life emergencies have used up your EF?

Post by wwross »

Good question. I guess the only recent unforseen time I had to pull out money was to support a family member who got into credit card debt because of health circumstances of her husband. It was quite a bit of money ($40k). It came out of a money market account that, along with the various cash balances I have in our brokerage account (for real balancing purposes) serves as a combination cash/revolving/emergency fund.

From what I have heard, many B-Heads do this, rather than having an emergency fund, per se.
HongKonger
Posts: 1079
Joined: Tue Jun 21, 2011 10:35 am
Location: Deep in the Balkans

Re: What kind of real life emergencies have used up your EF?

Post by HongKonger »

The sudden death of a family member that required long distance travel at short notice, hotels, pet sitter and a funeral to pay for. It didn't use up my total stash, but immediately followed by a week long ICU stay for a pet right before Christmas certainly put a dent in things well into the new year.
TA_Lurker
Posts: 202
Joined: Mon Nov 03, 2008 10:41 pm

Re: What kind of real life emergencies have used up your EF?

Post by TA_Lurker »

A car repair that came in below my deductible
KyleAAA
Posts: 8638
Joined: Wed Jul 01, 2009 5:35 pm
Contact:

Re: What kind of real life emergencies have used up your EF?

Post by KyleAAA »

Car repair, unexpected home repairs, sickness in the family (if the family member doesn't have insurance), etc. There are a ton of expenses you can't control. Also, most people can't count on getting severance pay if they're laid off or fired.
dbr
Posts: 33842
Joined: Sun Mar 04, 2007 9:50 am

Re: What kind of real life emergencies have used up your EF?

Post by dbr »

As a retiree the concept of an emergency fund probably does not apply exactly but the following illustrate things that can happen, probably none in the truly severe category, but in the under $10K unanticipated and needed right now one could list:

1) Dental restorations after severe accident not 100% insured.

2) Legal costs for an unfortunate incident.

3) Appealing US Government denial of benefits (won the case, hands down, a sordid story but if OPM means anything to you, you can guess what is involved).

4) Car repair black swan not expected maintenance or can be auto accident replacement vehicle, often an unplanned but significant upgrade.

5) Property assessment associated with street and utility improvements (maybe not unanticipated but a 50 year event).

6) Rare travel opportunity, extensive but unplanned (perhaps more a contingency than an emergency).

Probably could think of more if pressed.
FafnerMorell
Posts: 686
Joined: Mon Sep 15, 2008 10:27 am

Re: What kind of real life emergencies have used up your EF?

Post by FafnerMorell »

Mistakes by IRS
dbr
Posts: 33842
Joined: Sun Mar 04, 2007 9:50 am

Re: What kind of real life emergencies have used up your EF?

Post by dbr »

FafnerMorell wrote:Mistakes by IRS
Indeed, or by the TP (taxpayer).

I have had instances where covering for a certainly to be received refund has happened.
User avatar
Watty
Posts: 20920
Joined: Wed Oct 10, 2007 3:55 pm

Re: What kind of real life emergencies have used up your EF?

Post by Watty »

In addition to "bad' emergencies you also need to take into account that the emergency fund can also be used to take advantage of "good" emergencies. I have seen having cash readily available make these things possible or at least more easily doable.

1) Unexpectedly buying a car that an older relative of a friend was looking to sell cheaply and easily. Being able to write a check made this possible, the few days needed shuffle funds around or to get a car loan would have made this deal not work. The person selling the car knew that they were giving a big discount(basically the low wholesale price) for the ease of selling it so it was win/win situation.

2) Before we met a friend of my wife's broke up with her boyfriend after they had bought a non-refundable trip to Hawaii. For the price of a plane ticket my wife got a week in Hawaii with her friend since the rest of the trip was already paid for.

3) Taking some extra time off between jobs when you find a new job.

4) Being able to say "no" to your boss without worrying too much about your job. It is funny, once the boss knew what the limits were he was fine with it and they worked around it.

5) Presumptively expensive fertility treatments that resulted in much loved quadruplets for some distant acquaintances.

6) Being willing to get "bumped" from an airline flight and to extend a vacation by three days.

7) Being able to take a spouse along on an unexpected extended business trip for several months in Switzerland, and paying for your just graduated high school son(me) to go to summer school and stay in the dorm at college

Lots of others too.
MathWizard
Posts: 4396
Joined: Tue Jul 26, 2011 1:35 pm

Re: What kind of real life emergencies have used up your EF?

Post by MathWizard »

runnergirl wrote:I am trying to figure out what sum of money to put in my emergency fund for unforeseen events. Many of the foreseeable events, such as medical bills and unemployment, can be planned for due to insurance and severance pay, and the occasional need for a new car or home repair can be reasonably budgeted for. What kind of unforeseen and costly events have you actually encountered?
I've never had to use my EF.

My EF is all about job loss for me. Not everbody gets severance pay, and UI is pretty pitiful at replacing my salary.
Short of losing my job, it would take a triple whammy to cause me to dip into the second tier of my EF:

Tornado hits my house and my family and I need to stay in a hotel while I commute to work.
Same Tornado destroys both cars which do not have comprehensive insurance, and I'm living far away
so that I cannot bike to work or ride the bus, and there's nobody to ride-share with.
Wife loses job at the same time.

In reality, I would probably borrow an old car/pickup from a brother, and my family would probably stay
with relatives for a short while if she has lost her job, and I would share a hotel room and commute with someone.
pc95
Posts: 215
Joined: Sat Sep 17, 2011 9:26 pm

Re: What kind of real life emergencies have used up your EF?

Post by pc95 »

Medical bills can eat your Emergency Fund in Huge chunks - more so than others imo....invest time/money in exercising for your health and get into a routine as soon as you can.
spencer99
Posts: 356
Joined: Thu Apr 01, 2010 5:17 pm

Re: What kind of real life emergencies have used up your EF?

Post by spencer99 »

runnergirl wrote:I am trying to figure out what sum of money to put in my emergency fund for unforeseen events. ... What kind of unforeseen and costly events have you actually encountered?
My needs have been relatively minor although the fund has served its purpose of keeping the expenses off the plastic. Recent expenses were a fridge that died and a chipped tooth/crown needed (both costs around $1,000). I don't know if this is a good practice but my EF is not intended to cover loss of employment. I'm hopefully covered on that front with income continuation insurance and almost a year of accumulated leave time.

S
xerty24
Posts: 4827
Joined: Tue May 15, 2007 3:43 pm

Re: What kind of real life emergencies have used up your EF?

Post by xerty24 »

Threads like this scare you since only people with emergencies reply. Better to ask if you ever had a big emergency, and if so, what it was. Polls are good for this.
No excuses, no regrets.
cazaubon
Posts: 35
Joined: Wed Feb 09, 2011 4:49 pm

Re: What kind of real life emergencies have used up your EF?

Post by cazaubon »

I used my emergency fund when I had 3 special assessments in one year for my condo, totalling over $16,000. My Efund is currently 25K.
Grt2bOutdoors
Posts: 23149
Joined: Thu Apr 05, 2007 8:20 pm
Location: New York

Re: What kind of real life emergencies have used up your EF?

Post by Grt2bOutdoors »

These are real examples, but while it dinged by e-fund, it did not deplete it, I don't subscribe to keeping 3 months normal expenses because it only takes one large unexpected expense to blow that theory right out of the water.

1) Unexpected dental expense - root canal + crown - money well spent but still unexpected and not totally covered by insurance: $1,500

2) Birth of my child: again not totally covered by insurance, but the doc had up to 1 year to bill - guess what, exactly 364 days later, a bill showed up in the mail - whoops! :annoyed

3) Sewer pipe broke: oh, I know you save for home maintenance over time, but not after 2 weeks have passed from closing on the purchase. Whoops, again! :annoyed
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions
User avatar
serbeer
Posts: 1250
Joined: Fri Dec 28, 2007 2:09 pm

Re: What kind of real life emergencies have used up your EF?

Post by serbeer »

The only time we used it when decided to purchase a new car. Was not really an emergency, but used up the whole fund to pay for it and replenished it within a month by money that came from old car sold through cars.com and work bonus that happened to be coming the same month.

So we used it more as operational cash reserve to avoid selling investments to pay for large ticket item.
livesoft
Posts: 73523
Joined: Thu Mar 01, 2007 8:00 pm

Re: What kind of real life emergencies have used up your EF?

Post by livesoft »

This earlier poll on the subject may interest readers of this thread (like xerty24): http://www.bogleheads.org/forum/viewtopic.php?t=35769
Wiki This signature message sponsored by sscritic: Learn to fish.
fareastwarriors
Posts: 1270
Joined: Tue Feb 14, 2012 12:31 pm

Re: What kind of real life emergencies have used up your EF?

Post by fareastwarriors »

Nothing yet. Let's hope to keep it this way. =)
john94549
Posts: 4638
Joined: Tue Jul 26, 2011 8:50 pm

Re: What kind of real life emergencies have used up your EF?

Post by john94549 »

I suspect most posters herein never got close to wiping out their EF. Even before I was a Boglehead (even before the term existed), I never got below $50 in my EF (mind you, this was in 1968, when $50 went a bit further). Back then, I tucked spare five dollar bills between the pages of an encyclopedia (safety deposit boxes being too expensive). Having $50 and a Volkswagen (and a pregnant wife), and reporting orders for OCS in Newport, Rhode Island (in 1969, September to be exact), that's about as close to zero as we ever got. We're a tad above $50 at this point.
User avatar
englishgirl
Posts: 2484
Joined: Thu Mar 01, 2007 5:34 pm
Location: FL

Re: What kind of real life emergencies have used up your EF?

Post by englishgirl »

I've dipped into mine several times, but not for big emergencies. Mine also qualifies as an "operational cash reserve".

1. House got broken into twice in quick succession. They left enough time for me to have replaced my laptop with the insurance money, and broke the front door frame the second time (the first time they entered through an open window). So...upgraded security system and new front door. Could I have claimed the front door on insurance? Maybe, but I didn't want any haggles over them wanting me to just fix the broken part - I didn't feel safe any more and wanted a better door and frame, pronto.
2. New fridge when the old one died, and of course I needed a counter depth refridgerator which are seemingly twice as expensive as normal.
3. Pool pump stopped working.
4. Grandmother's funeral, requiring unexpected travel to the UK.

Actually, all these expenses, and more, just went on credit cards. I only used the emergency money to pay off the credit card that month, and then rebuilt the emergency fund. I guess the big emergencies I stress about would be job loss, a house fire, or major illness/accident.
Sarah
User avatar
grabiner
Advisory Board
Posts: 28259
Joined: Tue Feb 20, 2007 11:58 pm
Location: Columbia, MD

Re: What kind of real life emergencies have used up your EF?

Post by grabiner »

I keep a virtual emergency fund (wiki link:Placing Cash Needs in a Tax-Advantaged Account ), and the only time I used part of it was a "good" emergency. I was planning to buy a new car, but got a good opportunity to sell my old car before I had saved all the taxable cash, so I sold some stock in order to pay cash for the car. Being able to do this saved me the trouble of arranging for a loan at the same time I bought the car.

I have never had any other unexpected bill that was more than I had available in cash and could save in a month. When I repaired my car after an accident, I paid the bill with my credit card, and there was already enough in my checking account to pay the card by the time the bill came due.
Wiki David Grabiner
Post Reply