By Alaina Trivax, WCI Columnist

The standard advice I’ve always heard for emergency funds recommends keeping around six months of expenses set aside in case of job loss or another disaster. For my husband (an early career PM&R physician working toward partnership with a private practice) and me, six months of expenses is a LOT of money.

Our most significant monthly expenses include our student loan payment; the daycare bill; our mortgage, groceries, and household bills; and our transportation costs (lease payments, car insurance, etc.). There are other recurring costs—child-related stuff like diapers and activities and various expenses for our dog—and it all adds up to quite a bit.

I’ll be honest—we don’t keep that recommended six-month emergency fund set aside in cash.

It’s actually one of our few financial disagreements. We have agreed to keep cash on hand that could cover around two months' worth of expenses. My husband, Brandon, cannot imagine such an emergency in which we’d need that much money at a single time, much less six months or more worth of expenses. Right or wrong, his focus is on his student loans and getting them paid.

If you’re a regular reader of my columns, I’m sure you’re thinking—again with the student loans? We refinanced them a while ago down to a 1% interest rate, so that’s not the problem. The issue is simply that the monthly payment requires such a massive chunk of our cash flow that it limits the other things we can do with our money (and with our lives!). In his mind, any extra funds are better served sent to student loans rather than set aside in an emergency fund. If we kept the emergency fund cash in one of those high-yield savings accounts, we’d technically come out a little ahead—but the student loans are such a mental burden for him that it just doesn’t matter.

However, earlier this year, we had the great pleasure of actually getting to use our emergency fund for not one but TWO emergencies within just weeks of each other. That really tested our definition of what constitutes an emergency, and it has us reevaluating the funds we keep for these situations.


Emergency #1: The Laundry

One Saturday evening, while trying to power through the weekend laundry rush, our dryer broke. It just stopped drying. I pushed the buttons, and nothing happened. Dead. I tried the good old unplug-it-and-plug-it-back-in trick. I flipped the breaker switch a couple of times. Still nothing.

I called Brandon—he’s usually the laundry-doer in our house. I was just subbing in since he was working this particular weekend. He said, “Oh yeah, the dryer’s been doing that. Sometimes it works again later.” OK, sure. I’ll let it get a good night of sleep and try to finish the laundry in the morning.

The next morning, it still wasn’t responding. I’ve learned that this pattern of “sometimes not working” had been happening for weeks. OK then. It was an older appliance anyway, and we’d had it serviced a few times under a home warranty during Brandon’s residency and fellowship. In reading about the problems that could have caused it to fail, it became clear it was nothing that I was going to repair on my own. Perhaps my sweet dryer had just met its end.

Of course, there’s never a convenient time for a dryer to break—but when you have two small kids and a dog, that time is definitely not the week before a vacation.

Brandon was off to work again that day, so I did the world’s fastest research and essentially impulse-bought a dryer. I ran downstairs to check if we had a gas or electric dryer hookup; I saw that the dryer was plugged into the wall outlet and figured it must be electric. I wanted to get the new one ordered before the kids woke up, so I scrolled through a few recommendations from Google. Ultimately, I went with a mid-range model for $800. It seemed to have enough features to get the job done, but I didn’t feel like I was throwing away too much money. We plan to only be in this house for another five-ish years and don’t plan to take the dryer with us.

Fast forward to Thursday: dryer delivery day! I took the morning off to meet the delivery truck and supervise the installation of the new dryer. The delivery guys arrived and came inside to check out the setup. Immediately, they informed me of a problem. The dryer I ordered wasn’t going to work. It turns out that just because my appliance plugs into an electrical outlet doesn’t mean it’s electric. I have a gas dryer. Surprise! Thankfully, I had the presence of mind to refuse delivery of that dryer; I’d just have to wait up to 30 days to get a refund.

(I later learned that had I accepted delivery, we would have been stuck with that dryer—even though it wouldn't work for my house. A bonus tip for you: be sure to research return policies before big purchases!)

Back to Google. I found another dryer—gas, this time—and ordered it (and from somewhere with a much better return policy!). Now, we were up to $1,600 in pending charges for dryers. Then, I needed to schedule a plumber to install this dryer, since the delivery guys who had been out that morning warned me that my basement gas lines weren’t up to code and that I’d need to address that, too. Add in another $300 for this project.

My husband and I were leaving for vacation in just two days. While it wasn’t a financial problem, I had to send my boys off to my in-laws with a basket full of dirty laundry. Then, I'd have to rely on my mom to coordinate the delivery of our new dryer. Eventually, we did get the $800 for that first dryer credited back to our account. It took about two weeks to receive the refund, and I am thankful we had the financial flexibility to float that mistake on our credit card for so long. All in all, this dryer “emergency” came to around $1,100.

But was it an emergency? Or should we have been planning for this appliance to need replacement? I might like to create a “slush fund” for home maintenance that we keep available for minor repairs and projects. These things aren’t actual emergencies—it’s reasonable to expect that home appliances will need replacement as time goes on. It feels wasteful to set aside a ton of cash for these problems, so maybe it should just be enough to cover one or two appliance-replacement-type situations at a time.

More information here:

My Emergency Fund in Action

What to Do When Your Emergency Fund Fails


Emergency #2: The Canceled Flight

We got the dryer ordered, with a delivery date set for the day before we would return from our vacation. Brandon and I sent the kids off to his parents, and we headed to Cancun for some much-needed relaxation. It was incredible—so, so relaxing. We spent five days in the sun, and we were ready to come home; we missed our kids.

Cancun is in the same time zone as Michigan, making for easy travel logistics. We were set to board our flight home from Mexico on Wednesday morning, and we’d have a quick layover in Charlotte that afternoon. Then, we would return to Detroit by early evening on Wednesday night. We’d be back in plenty of time for Thursday's very exciting dryer installation!

Using your emergency fund

You can already imagine where this is going, I’m sure. On our way to the Cancun airport, I got a text alert that our flight from Charlotte to Detroit had been delayed. A major ice storm was hitting the Midwest, so we weren’t too surprised.

Annoying but no big deal. My mom had picked up the boys from my in-laws, and she was watching them at our house. But she had to leave Thursday. Brandon had to work that day, too. No problem, though. We’ll get home a little later. We’ll be tired, but we’ll be home.

We made it to Charlotte and explored the city a bit to kill time during our now seven-hour layover. Our flight was scheduled to take off at 10ish, so we settled in at the gate around 9pm. My phone dinged again just before the scheduled boarding time saying our flight was canceled. Canceled!

This time, we panicked a little. There was not a gate agent in sight. I called, texted, and messaged the airline. Wait times to connect to someone were hours long. Were we supposed to get a hotel and wait it out? Should we try to get on a different airline? Who pays if we do either of those?

Ding! Another text from the airline: we were rebooked on a morning flight. We were going to take it, and we started to look up hotels. Then, we noticed the date: the flight was on Friday morning, and it was currently Wednesday night. That was not going to work. We only had childcare scheduled for the rest of that night and needed to get home.

We left the airport to rent a car. We looked at the desk agent and said, “We’ll take whatever you have.” We rented the last available vehicle out of the Charlotte airport that night—a Kia Sorento—for $580 and drove the 10 hours home overnight.

That, in my mind, is a true emergency. We had to get home to our babies. We were willing to take whatever car we could get for whatever it cost to do so (Brandon did ask if a Tesla was available but he was denied). In that moment, I was so grateful to know that we could take whatever car they had—and we had a sufficient emergency fund to figure out how to pay for it.

More information here:

We’re (Finally) Broke! Why Being Worthless Feels Amazing


What Happens Now?

We took the next few months to replenish the money we grabbed from our emergency fund. Our cash flow is shockingly tight each month, so there wasn't a ton of extra savings to be had from each paycheck. Granted, a lot of the cash flow is also savings being allocated toward future expenses—we were setting aside funds for our older son’s preschool tuition payment that was due in July, and we were planning for recurring expenses like car insurance and our health insurance deductible. If we had to refill the emergency fund faster, we could pause on saving for some of those expenses for a bit.

Neither of these situations was terribly expensive, but they did drop our emergency fund by about 10%. Although my husband is much more relaxed about it, the idea of having an insufficient emergency fund worries me quite a bit.

I have much more experience with financial struggles than he does—I know what it’s like not to have enough money to pay the bills. The idea of running out of money and being unable to care for my kids completely freaks me out. Our experience of needing to rent a car (any car!) and drive home to our kids underscored the importance of an emergency fund for him, but we still disagree about how much money should be set aside for this. We’re usually on the same page with money matters, but not here. It'll be an ongoing conversation for us.

How do you handle your emergency savings? Do you keep separate pots of money for catastrophic situations, like a job loss, vs. the more expected “emergencies” like broken appliances and home repairs? Do you really have that recommended six months of savings set aside in cash? Comment below!