What do you class as emergencies?

NicW86

Ok so a really silly question being asked here but:

What would you class an emergency?

I'm just working on organising some pots to try and make better work of my money to help look at ways of reducing our overall debts with spare cash. 

I'll have a pot for emergencies, car, xmas/birthdays so far but I wasn't sure to class car repairs as emergencies. I was thinking that the car pot is to cover more of the MOT/Tax/insurances for them both. 

Any advice on pots to have would be appreciated 👍🏻

sammyjammy

Car repairs definitely shouldn't be an emergency, well shouldn't be planned that way, just allow an amount in the car pot for them and hopefully your emergency pot will grow and grow!

BlueJ94

vet bills if applicable 

tacpot12

Emergencies are the "unplanned for" failures, like a washing machine that goes wrong just outside of the 6 year warranty rather than lasting 15 years. Ideally, you whould be saving to replace the washer and all your other appliances over a period that is a little less than their expected lifetimes, but if anything goes wrong a long time before it should, I would call that an emergency.

I have a seperate pot for car replacement and another pot for car maintenance. I also save for the annual car bills like insurance, breakdown cover, MOT and tax. 

Your 'emergencies' fund might also be where you keep the money for anything that you decide to self-insure, like boilerr breakdowns. 

Kakiste

I used my first emergency fund to replace a broken washing machine and then have dental work done. 

Jami74

NicW86 said:

What would you class an emergency?

For me an emergency would be something that I had to pay that I had not budgeted for. A puncture would be covered by the money I've put away for car repairs. But I don't have £1000 saved to buy another car in a hurry if mine is written off, so that would count as an emergency.

 Can you look back over the last few years to see what you've spent on car repairs? Divide the amount by the number of years to get an annual amount, then divide it by 12 to get a monthly amount and that's the amount to budget for MOT/services/repairs. Anything that exceeds what you have budgeted for would have to come from somewhere else (emergency fund, credit, holiday pot etc).

 My car is old. It costs me about £300 a year for tax and insurance and up to £900 a year on MOT, repairs, replacement tyres etc. I know it might sound a lot but it is very much cheaper than paying finance on a new car. I put £100 into a separate account every month.

kimwp

So if you know you will need/want to spend on something, that's not an emergency. So your car pot (likely repairs, mot, insurance, tax etc) is separate to your emergency pot. Similarly, your present pot is separate. All non-emergency pots will have target values which are the amounts you are expecting to spend on those things- ideally you have saved the right amount in the pot just before you need to spend it.

Your emergency pot doesn't have a target amount in the same way because if you are expecting to spend a certain amount for something, then that needs its own pot. Having said that, you could use possible issues as an idea of how much to save eg if you don't have a car but might suddenly need one*. A common aim is 3-6 months of living expenses in case of income loss as this would cover most other unexpected events as well.

*but if you know you will need one, then you should have a separate car buying pot.

TheAble

Probably the main emergency would be if you lost your job. You'd need the fund to support your essential living expenses while you looked for another.

rugbymadfamily

For me, my emergency fund is if either of us lose our jobs. Near enough everything else would be covered by a "pot" or we would make cut backs in other areas. My emergency fund is literally the very last resort if all other options are exhausted.