10 Unfortunate Situations Where You’ll Dip Into Your Emergency Fund

No one likes to talk about money. It’s a sensitive and sometimes exhausting topic. It’s easy to forget when you have plenty of it, but what happens when you suddenly don’t? – Many life events might warrant using an emergency fund. Emergency funds are accounts with money stored in them for use in case of an emergency.

But what counts as an emergency big enough to dip into those funds? – This article will present ten different reasons why you may need to use an emergency fund.

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Job Loss

It’s always a good idea to plan for a loss of income. Bills can hit hard when money isn’t coming into the house anymore. This makes it a scary time if you ever get laid off.

Even if you’re only away from work for a week because of a family emergency or personal illness, the loss of income can make a huge difference. If you lost your job completely, it can sometimes be a long time before you get another job. Your emergency fund will be there to help you keep the lights on in the meantime.

Retirement can also fall under this category. In many cases, retirement means a reduction in income. A lot of people will also lose their health insurance when they retire as well. This means that you want to make sure you have enough money set aside when you retire so you’re ready for whatever may happen.

Medical Emergency

Needing to miss work because you or a child were sick can cost you enough income as it is, but hospital expenses are another nightmare completely. A visit to the emergency room can cost thousands of dollars. If you need surgery, it costs even more. On top of this, medical emergencies often mean time away from work and a lot of lost income.

And if you or a loved one need cancer treatment, for example, you’re looking at a great deal of money in medical expenses. The good news is that this is exactly why you have an emergency fund. It will come in handy if such rainy day events need to be taken care of.

Car Repairs Or Replacement

Even minor car accidents can be terrifying when they happen. They can also be expensive.

If you drive an older car and get into even the most minor of accidents, your car will most likely be totaled by your insurance. The older your car is, the less money your insurance will pay to replace it. This can leave you paying a great deal of money for a new car out of pocket.

If your car isn’t totaled, your insurance still may not pay the full cost of any major repairs. You also may still have a deductible to pay on your insurance on top of that. None of these are small expenses by any means. Even if you’re not injured, you can still end up dipping into your emergency fund to pay for it.

Home Repairs

Owning a home means you have to be responsible for your own maintenance. If your pipes burst or your house catches fire, your homeowner’s insurance may not cover all of the damages. This can leave you having to pay thousands of dollars out of pocket to do repairs.

For those who live in warmer climates, homeowner’s insurance usually doesn’t cover damage caused by a termite infestation. Termites don’t move quickly through a home so it can be months before you even suspect something might be wrong. The longer they’re there, the more expensive the damage.

Even something simple like having your AC break down can cost a pretty penny. Emergency funds ensure that you’re ready for any of these events to happen at your home.


There are many reasons why people may need to move. Maybe your job is relocating and you have to follow. Maybe you got a new job in a different city. Whatever the reason, moving can be expensive. Larger delicate items may need to be moved by professional movers. You’ll probably need to hire at least a small moving van.

Depending on how far you have to move, travel expenses can get steep. And this is all ignoring that you have to buy a new place to live. Even if you already own a house that you’re able to sell, it might not be enough to cover the cost of a new house.

Your emergency fund is there in this situation. You can use that money to cover the extra cost of your new house if needed to avoid needing a large unsecured personal loan.

Loss Of Loved Ones

When a family member or loved one dies, it’s more than just heartbreaking. It also means taking to time to plan funerals and burials. And sometimes it means traveling to get that done.

This means time taken off of work to make plans. This often leads to a significant loss of income. If it’s a relative such as a parent, you may also be responsible for paying for funeral and burial services out of pocket too.

This means not only have you lost income due to missing work, but you also are needing to pay possibly thousands of dollars for a proper funeral service.

This is why having an emergency fund is so important. It allows you to feel confident when such tragedies occur.

Natural Disasters

Massive storms and wildfires destroy many homes and businesses every year. When this happens, it displaces thousands of people. Many of these people have nowhere else to go.

If your place of work gets damaged during a natural disaster, you may also be out of work until repairs can be done. Business owners may have insurance to be able to get you back to work before long, but you still have bills to pay in the meantime.

If your home gets damaged or even destroyed, then you may have lost your income and been forced into a hotel on the same day. You’ll need to use your emergency fund to cover the cost of the hotel while you’re without income. You may also need to use some of it to cover the cost of home repairs if your insurance doesn’t pay enough.


Kids are wonderful additions to any family. But if one is unexpected, they turn into a financial emergency quickly.

Giving birth in a hospital is expensive enough, and some jobs don’t offer paid maternity leave. Even if you do get paid leave after giving birth, you will still have extra expenses for childcare.

In other words, if you weren’t already financially prepared to have a child, you may need to dip into your emergency funds. Whether you use it to pay off the medical bills from giving birth or move it into a college savings account for the child, you’ll probably end up dipping into emergency money at some point.


Getting divorced can be difficult for both parties involved, especially if there are children involved. It can also set you back quite a bit of money. When you divorce, you generally divide all money and assets in half between both parties. However, not everyone wants to play fair when the time comes.

It’s always best to get strong legal help in a divorce, and it can cost a lot of money to get a good divorce lawyer. A good lawyer can make all the difference in custody battles. They can even increase your chances of getting any assets that are important to you.

But even if the assets are divided in your favor, it can still cost you a great deal of money. Not only will you most likely lose money to your former spouse, but now you have legal fees to deal with as well. You may need to split your emergency fund with your former spouse or use it to pay those legal fees.


There are many reasons why someone might get sued. You may have been hurt at work and are suing your employer. You might get sued over an unpaid medical bill. Whether you’re the person being sued or filing the lawsuit, it’s always best to have a good lawyer. A good lawyer is a good way to ensure a favorable outcome to your proceedings.

This can set you back a great deal of money though. Whichever side of the coin you’re one, if you’re successful, you still have to pay attorney’s fees. Your emergency fund is here to help you in these cases. It will help you pay off your legal fees in these rare cases.

Start Your Emergency Funds Today

No matter what life throws at you, it’s always important to be prepared. That’s why it’s always a good idea to have a healthy emergency fund ready to go in case you get unexpected expenses.

Go ahead and open your emergency funds account today! And if you enjoyed this article, be sure to check out our other financial advice articles.

If you are interested in even more lifestyle-related articles and information from us here at Bit Rebels, then we have a lot to choose from.

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