Here's What Happens When You Deplete Your Emergency Fund

It's estimated that 67% of Americans do not have enough money in emergency savings to cover an unplanned $400 expense, according to a recent SecureSave survey. But it's unclear as to whether those 67% of people simply depleted their savings account or never had an emergency fund to begin with.

If you're in the latter boat, it's important to prioritize building an emergency fund so you have cash reserves to tap in a pinch. But what if you had an emergency fund, only it's been whittled down to $0 due to a series of unavoidable withdrawals? Your best bet in that situation is to try to replenish your funds as soon as possible. If you don't, you'll risk landing in costly debt.

When you don't have any emergency cash reserves left

When you don't have money in an emergency fund, you risk racking up some form of debt the next time an unplanned bill arises that your regular paycheck can't cover. And often, that debt will be of the credit card variety, which could leave you vulnerable to accruing scores of interest on the sum you're forced to borrow.

Clearly, that's not a good thing at all. And that's why it's so important to not get to the point where you have no emergency savings left. In fact, a good bet is to try to put back emergency fund withdrawals each time you take one so you don't land in the position of having no cash to fall back on.

How to replenish your emergency fund

The whole purpose of having an emergency fund is to be able to tap that account when an unexpected expense arises. But you should also try to replenish your emergency fund after each withdrawal -- not when your balance is down to $0.

So, let's say you're forced to withdraw $1,000 from your savings to cover a car repair that can't wait. Once you've covered that expense, it's time to get into stealth savings mode. Cut back on spending in the coming weeks or months to carve out more money to put back into the bank. And also, consider taking on a side hustle to drum up more income.

Remember, these aren't moves you need to commit to on a permanent basis. That could be difficult. 

But if you know you're looking to replenish a $1,000 withdrawal, you'll basically want to limit your spending and push yourself to earn more income until that money is back in your bank account. From there, you can resume your usual spending and let go of that side job -- unless, of course, you decide to keep it so you can earn more money for fun spending. 

Let's be clear: It's better to have an emergency fund to deplete than to not have emergency savings at all. And you might have to raid your emergency savings in full if a large expense pops up and you can't put it off. 

But having no emergency fund leaves you extremely vulnerable to debt. So if yours is whittled down completely, try to make it a priority to get that money back into your account one way or another, whether by cutting spending, working a second job temporarily, or doing both at the same time.