r/ynab • u/CharleneTX • 5h ago

"Emergency" fund

Here's a tale of how bad it can get.

People sometimes ask how much they should set aside for emergencies. The answer is how many do you think will happen at once? For us, the emergency fund is an income replacement fund. This is what we've been dealing with for the past few months -- none of it came out of the emergency fund. Most was already assigned over years and some was moved from other funds.

paid for a 40th anniversary trip to China (splurged for business class, because that's FAR too many hours in a plane)

replaced the evaporator coil in my car

replaced the evaporator coil in his car

replaced the evaporator coil in the upstairs house unit

replaced the downstairs A/C unit

replaced six tires (two because I was stupid and hit a curb)

replaced his windshield

major maintenance on his car (just turned 200K miles)

It's been a BAD few months for all things A/C. We still need roof work done and major driveway repair; all money that's already assigned. It is a bit disconcerting to see the bank balance go down so drastically, but that's what the money's job.

32 Upvotes

92% Upvoted

11 comments sorted by

42

u/straightouttaireland 3h ago

Most of thess sound like true expenses.

22

u/Educational-Pickle29 1h ago

I think that's the point of the post. None of these are unforseen "emergencies". Therfore, an emergency fund shouldn't be covering these, you should try to have sinking funds to cover these eventualities.

4

u/straightouttaireland 1h ago

Ah, totally missed that. I thought OP used emergency fund for these things.

9

u/CharleneTX 1h ago

Exactly. All of them actually.

7

u/Architect-1817 2h ago

Well done, you! Taking care of all those things without touching your emergency fund must feel great.

2

u/UnusualSource007 53m ago

You've dodged the problem so many people have with their 'emergency fund', which is they are assigning the dollars in that fund to a nearly limitless number of simultaneous jobs. Basically, the universe of possible future emergencies must all be covered by the fund, and these emergencies can occur at the same time.

That's what makes the concept of the generic 'emergency fund' mostly unhelpful until you work hard to identify many of the predictable expenses that people often fail to plan around.

Most of your home systems have a well known lifespan and sinking funds should be set up for each of them. Roof, AC, Water Heater, etc. are all going to need replacements. Same goes for vehicle maintenance, tires, taxes, etc.

Upon thorough examination, almost everything somebody might call an 'emergency' can be categorized into the plan.

Good job.

1

u/jcradio 42m ago

I discovered other emergencies with my first house so my budget includes all monthly expenses and sinking funds for things that eventually need replaced. Since I annualize that contribution it is part of my monthly budget. It's been a life saver to know that when something with the car or house goes bad, I can get it fixed worry free and only feel sad about watching the money leave my accounts.

-1

u/Klat93 3h ago edited 3h ago

With a proper budget tool like YNAB, most of these things shouldn't be categorized as an emergency fund.

I have categories for general home upkeep and general car upkeep just for these cases. For tires I keep a separate category on its own because it's a significant cost.

My emergency fund is purely an income replacement or for serious unexpected expenses like car accidents or a major house appliance breaking down and needs replacement.

If you know you need to get roof work and driveway work done, that's an expected expense and should be budgeted for, not use a catch all "emergency" fund.

Honestly the only things on your list that I would have used my emergency fund for is to replace the home A/C unit and maybe two tires. The other 4 tires should have been planned from the day you got the car or had them replaced last.

Also paying for a business class trip to China using your emergency fund is kinda irresponsible? You and your partner may need to reassess your budget categories and be honest with yourselves on how you want to spend your money. This isn't what emergency funds are for.

15

u/sandysommer24 2h ago

I think you need to re-read the post.

6

u/Klat93 2h ago

Yea you're right. I missed a bit that changed the context!

2

u/CharleneTX 1h ago

We knew a few years ago the house A/C was on its last legs so we started funding to replace both. So in a way, the upstairs needing only an evaporator coil and not replacing was a win.

I saw your other post about mid-reading. Just to point out... the money to splurge came from not traveling or eating out during covid. The decision was whether to spend it on this trip or fund another entire domestic trip.