Dipping Into the Emergency Fund

Family gathered around MacBook

The family gathered around the old MacBook, watching a movie during the Great Plague of November 2011 when we were all sick as dogs.

We bought a new computer this past weekend. This was definitely not a budgeted expense.

The old one worked great, right up until the minute I watered the prone-to-leak plant that was hanging above where it sat. When I returned later and picked it up, water poured out.

It just so happens that I recently started trying to make money again and that computer was my master plan and key, all rolled into one. And our computer was in great shape, and computers aren’t cheap. I was a little distraught for a bit before I remembered that a computer is just a thing.

We used our emergency fund to purchase a replacement. Fortunately, Jason receives a nice discount since he teaches at a local university, so we were able to keep this purchase below $1500. And since the computer will be used extensively to run my business, it is tax deductible to some degree.

Everyone’s circumstances are different and for some, a new computer may not be considered an emergency. I work exclusively on this computer, my volunteer work can be done mostly from home using this computer, Jason needs a computer when he teaches, and we manage our music and photo libraries, as well as our finances, from this computer.

There was no question that this was an acceptable use of our emergency fund.

However, as I was updating our budget spreadsheet last night, I started to wonder why we haven’t created a targeted savings account for computer repairs and replacements? We have savings accounts for the renovation, a new car, Christmas, taxes, and a couple of others. These are all things that don’t happen too often, but we know that when they do we drop quite a bit of money on them. Computers always die one way or another, and I’ve not been without one for almost 20 years, so why has it taken me this long to realize that I need to budget for this expense?

I think this is a great example of how saving and spending money is more of a mental challenge for me than any real exercise in physical discipline. I have to actually pay attention and think when I’m spending money and ask why and how instead of how much. I also think this means I’ve come pretty far from the way I used to behave years ago, spending money without a second thought.

It hurt to spend from our emergency fund. We’ll definitely prioritize replacing that money so that our cushion is, well, cushiony, again.

You can probably guess what account I’ll be opening up at ING today.

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How do you budget or plan for irregular large expenses?

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