Dave Says: When it is time to dip into the emergency fund

Dear Dave,

My husband lost his job last week. The good news is we’re completely debt-free, and we have a six-month emergency fund saved up. I work part-time, since we have young children, and I’ve been bringing home about $800 a month. Should we cut our budget down to bare bones now, or do you think we could continue living as usual for the time being since we have so much money saved?


Dear Jayme,

I’m sorry to hear about your husband losing his job. At the same time, I’m really proud of you two for saving and preparing yourselves financially for this kind of scenario. Eight hundred dollars a month isn’t bad for a part-time job, but it’s not nearly enough to run a household—even one that’s debt-free—when there are kids in the picture.

You should already be living on a little as possible in order to make the money in your emergency fund last as long as it can. It’s beans and rice time in your house. That means no restaurants, no vacations, and no movies. In other words, no spending on anything but bare necessities until your husband finds another good job, and you guys are back on your financial feet again. Right now, your priorities are keeping the lights on, the water running, and making sure there’s food in the pantry.

This is a textbook definition of an emergency, Jayme. Use your emergency fund. It’s there for times just like these. But be wise, and spend as little as humanly possible. God bless you all!