Is This an Emergency?

Matthew has an idea of how to pay a big medical bill, but he wants to run it by Dave.

QUESTION: Matthew in Texas and his wife had a baby. They now have $2,500 in medical bills, and he's not sure if he should pay it off by dipping into their emergency fund or make payment plans. Dave considers the medical bill an emergency and recommends paying it off.

ANSWER: Would medical not be an emergency? If you have $7,000 saved up, I'd write a check and pay your bill. Be done with it and then rebuild your emergency fund, which is probably a little low to start with.

Write that check, and then start working on your career and the income side of the equation. Get that up and then raise your emergency fund a little higher as soon as possible.