To use or not use my Emergency Fund?

**LuxLiving** · 04-11-2007, 07:03 AM

If they'll let you make payments at no interest at the dentist's I'd leave my E-fund earning interest and make the payments (IF making them didn't compromise my other budget priorities!). Meaning I can still make all my other payments, eat, live, breathe and still make the dental payments, then I'd just pay it out and keep my $$'s earning.

I'm interested in hearing how others would do it.

**SadieElvis** · 04-11-2007, 07:06 AM

I have the means to make the payments. I've recently decided to put all of my financial power behind paying off a $2700 cc debt and have stopped my weekly contributions to my ING EF(currently 4.5%). Isn't that right? Pay off debt before you add more to savings?

**creditcardfree** · 04-11-2007, 08:18 AM

I agree with Lux. Make the payments since there are no interest charges. It would be an emergency if you had no other means to pay for it.

Sounds like you are paying off debt before adding to savings and I have to agree that I like that idea too.

If my efforts toward debt were only $200/mo than I would still make payments to dentist, pay only minumims on debt until dentist is paid, then go back to making larger CC payoff payments. After that it is all yours to SAVE!!!

**Aleta** · 04-11-2007, 09:01 AM

I agree with Lux. As long as you can make the payments without an interest charge; leave the money in the account. By the way, you said that you had $2300 in an EFund and a cc debt of $2700. I don't know what interest rate you are paying on your credit card, but I bet it's more than the 4.5% you're earning at ING. Before I came to this forum, I never believed in paying off debt before saving for an emergency. There are a few things that can't be handled with a credit card, but very few. A lot of dentists will except credit cards to pay off bills. Some on this board believe that paying off debt is saving. You can always use your credit card again if you had an emergency. You didn't say how much your payments were on the card. You could eliminate that card really fast and take the future money and put it back into your savings account.

**autoxer** · 04-11-2007, 09:17 AM

I would use most of the emergency fund to pay down the credit card. Keeping the money in the bank earning $8/ month isn't worth it while paying $20/month in interest to the CC company. In an emergency I would charge back up the CC. Once the debts are paid, I would then start rebuilding the emergency fund.

Over the past year, I have become very anti-debt, but the growth of my emergency fund has really gained speed lately while I don't have any debts to worry about.

**nanamom** · 04-11-2007, 05:09 PM

I agree with paying at no interest. I am doing that on some dr bills I incurred in January of 06. I would pay as much on the CC bill as I can but I would hesitate to use the EF for that. It depends on how secure your job is and how soon you could build it back up.

**disneysteve** · 04-12-2007, 05:13 PM

I agree with making payments with one possible exception. Ask the doctor if there would be any discount for paying in full upfront. My daughter's orthodontist offers interest-free financing or a 10% discount for paying in full.

As for drawing from the EF, I'm a little different in that regard. I don't keep my EF under lock and key. It is a dynamic account that I use from time to time to cover cashflow needs. I'll put money in, take money out, transfer money between accounts, etc., based on what I need and when I need it.

**Bluezy** · 04-21-2007, 10:13 PM

If you have an HSA, this scenario might qualify for tax-free use of the HSA money, leaving no debt or dent in the emergent fund.

To use or not use my Emergency Fund?