Minor Car Repairs Should Be In The Budget
Ryan is having a disagreement with his wife. When they have car repairs, Ryan wants to use the emergency fund. His wife says it isn't an emergency. Dave agrees with Ryan's wife.
QUESTION: Ryan in South Bend is having a disagreement with his wife. They’re on Baby Step 3 and about 1/3 finished with it. When they have car repairs, Ryan wants to use the emergency fund. His wife has the view that it isn’t an emergency, and they should just save up to fix the problem. Dave says the occasional car problem isn’t an emergency.
ANSWER: You’re both wrong. Cars break. You don’t have enough money in your budget for car repairs. A standard car repair shouldn’t be an emergency. An engine blowing up or a transmission going out would be an emergency, but you’ve got ongoing maintenance and repairs on cars. That’s just part of owning them. You’ve underfunded the car repairs category in your budget.
In the meantime, I would fix the car if I were in your shoes. But then you’ve got to fix your budget so that next time it comes up, you don’t have to hit the emergency fund. The further you get in your wealth building, the bigger the emergency must be in order to qualify as an emergency. When you first started, everything was an emergency because you were broke. You’ve taken a step past that to where everything is not an emergency. This is something that shouldn’t be an emergency, and you’ve got to take the next step, which is adequately funding these areas so that they don’t continue to come back and bite you.