When to use emergency savings

It is good to have three to six months of living expenses saved up as emergency savings. The savings should not be easily accessible to avoid unnecessary spending; a savings account or a short-term investment account can do. But what is the best time to spend what you have saved up? And how should you spend it? There are typically two events that may require the use of savings:


Emergencies include sudden sickness, death of a loved one and legal arrest. Specify the people around you who’s issues shall be considered as emergencies so that your emergency scope is limited. Don’t make everybody’s issue your emergency.

Business/job loss

When the main source of livelihood goes down or is lost, the emergency savings come in handy. 

However, when emergencies come, before you spend your savings please try the following:

Adjust the budget before using emergency funds.

Reduce unnecessary spending like entertainment to make sure you withdraw as little emergency funds as possible.

Where possible, ask for help.

If it is a parent or a grandparent who is taken ill, first involve the larger family before deciding to pay the whole medical bill. Even if the help may be little, it will still save your emergency fund.

Use insurance.

Things like medical insurance, retrenchment cover and personal indemnity insurance cover takes care of emergencies and can save you a lot of money in the long run. Consult whether your insurance can take care of your current emergency before using personal funds.

All in all, before handling any emergency take a deep breathe and tell yourself that you’ve got this!