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Ask Dave

Speeding ticket emergency

Ariel is on Twitter, and she asks about dipping into her emergency fund to pay a speeding ticket. Dave gives her some guidelines to determine whether or not this is a real emergency.

QUESTION: Ariel follows Dave on Twitter and asks if a speeding ticket is a reason to dip into your emergency fund. According to Dave, it can depend on the size of the fine in relation to your overall income.

ANSWER: Possibly. You certainly have to pay it, because in most states you could lose your license if you don’t pay a speeding ticket. You’d have a real emergency then.

I think the answer to the question is this: what size is the ticket in relation to your income? If you make $200,000 a year and get a $79 dollar ticket, then shut up and pay the ticket out of your budget. If you make $20,000 a year and you’ve got a $300 speeding ticket, now you might have an emergency. Can you cash flow it out of your budget? If you can, then no, don’t touch your emergency fund. But if you can’t, it’s an emergency. You’ve got to get it paid.

I got my first speeding ticket in years back in the summer. I hadn’t gotten one in a long, long time—probably more than a decade ago. It was a pretty good one, so sometimes it can be an emergency. That one didn’t quite hit my emergency fund, and I was able to cash flow it. But it was still kind of like Stupid Tax, right?