I Always Follow This Important Rule When Tapping My Emergency Fund

A recent survey by SecureSave found that 67% of Americans don't have enough savings to cover a $400 emergency expense. However, it's important to have enough money in your savings account to cover at least three months' worth of essential expenses. That way, if you were to lose your job, you'd be able to pay your living costs without immediately resorting to credit card debt.

These days, I try my best to keep about a year's worth of living expenses in my emergency fund. It's important for me to have that much money in there for a number of reasons, a primary one being that I'm self-employed and have no unemployment benefits to fall back on should I lose my job.

But my emergency fund hasn't always been this robust. At many points during adulthood, I only had enough money in savings to cover five months' worth of expenses, or six, as opposed to the 12 months I could cover right now.

Meanwhile, I've had to tap my emergency fund many times over the years. When an old car of mine was totaled in a minor accident, for example, I had to dip into my emergency fund to come up with the down payment for a new one. And I've had many home repairs that my paycheck couldn't come close to covering, like having to replace two air conditioning systems and a water heater.

But while I've never been hesitant to tap my emergency fund as needed, there's a rule I always try to follow after the fact. And it's helped me keep my savings where I want them to be.

I always aim to put the money back

Some people are hesitant to tap their emergency funds and prefer to reach for credit cards so they're not raiding their savings. This doesn't make sense to me.

I don't see the point in paying interest on a credit card when I have the money I need sitting right there in the bank. So even though tapping an emergency fund is not necessarily an easy pill to swallow, it can be a necessary one, and I won't hesitate to do it when large expenses arise unexpectedly.

But one thing I've always tried to do after taking an emergency fund withdrawal is put the money back. And while that hasn't been easy, I've largely managed to do it within six months to a year each time.

One benefit to being self-employed is being able to pick up extra work to boost your income. As a working mom, trust me when I say I have very little time to take on extra work. But I've made it happen after raiding my emergency fund to replenish following a withdrawal.

Cutting back on expenses is something else I've done in the past to replenish my emergency fund. But that's harder to do when you have kids and various commitments, so I've found that working more has usually been a better option for me.

You don't want to just keep dipping in

The whole point of having an emergency fund is to be able to dip in as needed. But if you keep taking withdrawals without making any effort to put at least some of that money back, you might end up in a situation where you're short on savings when the next crisis arises, or you don't have any savings left at all.

So the next time you're forced to raid your emergency fund, come up with a plan to replace the money you've spent afterward. It might take time, and it could require you to pick up a side hustle to boost your income. But if you're like me, you'll enjoy the peace of mind that comes with knowing that your emergency savings have been restored to their original state.