Pulling Emergency Money

Mitch recently had an emergency room scare and now must deal with the bills for it.

QUESTION: Mitch in Alaska says his daughter was rushed to the emergency room. They met their $10,000 deductible in one visit. He wants to know if he should pull the money out of his emergency fund or $16,000 in savings. Which is the best option?

Dave's ANSWER: It doesn't really matter. You've had an emergency. You have $26,000 in savings, and you're about to write a check for $10,000. It doesn't really matter.

You need an emergency fund as soon as you're done with this. You've got the money to do both. You can say that you'll take it out of the emergency fund and then you put the other money back into the emergency fund, but it's just semantics at that point. You are just $10,000 poorer, but, thank goodness, the doctors took care of your baby. That is what is important. That's why we have emergency funds and why we have health insurance.