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Misappropriation of the Emergency Fund???

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My husband and I are on Baby Steps 4 (Invest 15% for retirement), 5 (College fund), and 6 (Pay off home early) of the Dave Ramsey Plan. We save for larger purchases as well including replacement vehicles. We’ve been saving for a slightly larger travel trailer since we have twice as many kids as we do beds and sleeping on the floor in winter months is tough. It rained and was terribly windy for 24 hours solid on one of the days on our three week Christmas trip and all six of us were stuck inside the trailer. It was the final straw.

We have been saving for a while and have $2,000 to upgrade to a larger trailer and $2,000 as a buffer in case we can’t sell our trailer for as much as we think it’s worth. Here’s the problem, we can’t sell our current trailer until we get another one. It can take 4-5 months to find a reasonably priced trailer (it took me four months to find our first trailer) and I’m not willing to go without camping that long. We were recently offered a crazy deal on the exact trailer we were looking to purchase and it’s worth $1,800 more than our current. It’s a smoking deal! Everything turned out perfect in the inspection and my husband is picking it up today.

We don’t use credit EVER so we are writing a check out of our emergency fund and will replenish when we sell our current trailer.

I get it, I can stop camping, sell our trailer, and then look for another when I sell ours. I am making a stupid call on this but if this weren’t a trailer and was a car instead (and you can’t go without a car most places), what do you do? This will come up again in the next few years when we replace our vehicles. The last few, our current vehicles were valued so low, we simply saved extra. Now that our cars are worth around $10K, does that mean I need to save an extra $10K just so I don’t temporarily use my emergency fund? That doesn’t seem reasonable.

I’ve never touched my emergency fund before so it feels wrong using it but I’m not quite sure what the solution should be.

What would you do?


21 Comments

  • Reply Cheryl |

    Well I don’t camp and truly don’t feel another camper is an emergency so I feel this is one big mistake and now just wait till a real emergency happens. I have to wonder if this is why all of you posters are in debt. You want it, you buy. Wonder if it is my age (61) we always waited for vacations and anything that wasn’t essential till we had the money.

    • Reply Beks |

      I’m not in debt (other than my mortgage). I agree, this isn’t an emergency but I’m trying to figure out how others are replacing vehicles. Sell their current first then go without? How is that possible? Contingency sales like mortgages? When I sell my current, the money will replenish the emergency fund.

      • Reply csdx |

        Generally our plan is save up money for a car early so it’s not an ’emergency’ when replacing one, and we drive them long enough that any residual value is not a significant factor is the replacement costs. Usually we’ll start saving up a year or two before the intended replacement, and just continue driving until a big enough repair comes up that it doesn’t make sense anymore. Since we have two cars that just means that we survive as a 1 car household for a few a week or two while shopping for a new vehicle. If needed a week long budget rental car could qualify as an emergency and wouldn’t be that big an expense overall.

        Certainly if it was a completely unexpected event like both cars dying then it’d definitely be an emergency since we’d have no transportation and we’d look at using the fund to get 1 replacement car.

      • Reply Lisa |

        After we pay off a vehicle, we live with it for as many years as possible before getting a replacement, allowing us to save. Our brand new 1998 sedan was paid off in 2000, and finally died in 2018. It had uncomfortable seats, needed repairs (broken door handle, mirror, interior light) and was stinky from teen drivers. But we used it up. Its low value paid for the registration of the next one.

  • Reply Margann34 |

    I see your dilemma. I would say on a non essential (and it is). You should sell the old and then buy the new. Although you really enjoy camping, it is not essential to life. And you can still go camping and endure the crowded camper knowing that you will soon be getting another one. So once again, this is really an emotional decision (I love camping but it is crowded in the RV. I want too be less crowded). You have turned a want into a need. Just read your post and see how the language presents that. All that being said, the deal is done (also a BAD blogger habit). So now the question is, how much risk did you take (how low is the emergency fund)? And how long will it take to replenish It? If all goes well, it will be replenished in a few months. But what if all does not go Well?? Now vehicles are a little harder situation. They ARE a need for most people. I actually am not against a moderate loan for a used vehicle. But I am talking a modest vehicle. That is another situation where people turn wants into needs and buy too much vehicle. If you are truly committed to Dave Ramsey. Then your only option is to save cash, sell the old the but the new. But vehicles are readily available and quick to turn around. You could can pretty much sell and buy at any time. If you happen to wreck, you should have insurance coverage for a new vehicle. So in most situations, you should not have to use the emergency fund.

  • Reply Andrea |

    I’ll be the voice of dissent with the previous posters and say I don’t think this is a big deal and I would have done the same thing. I’d say differently if this was Hope or Sarah, but Beks just has her mortgage, this is a planned purchase, and it sounds like buying now got them a good deal. There is a plan to replenish those funds, and it doesn’t sound like the emergency fund is completely depleted, just down a little bit temporarily. So get the old listed immediately so you can sell it and recoup the money as soon as possible.

    (Oh, and the last time I replaced a vehicle, I traded my old one in at the same time and its value was applied against the purchase.)

  • Reply Patti from California |

    I’m with Andrea.
    Purchasing with cash to get a deal when you are not in debt is a reasonable choice.
    Beks still has cash. Probably more than the $1,000 that Dave Ramsey suggests you have while you are paying off debt. It’s not classic Dave Ramsey, but that’s okay. She’s out of debt, remember?

  • Reply Nathan Hebert |

    Echoing the other sentiments of non essential means it’s not an emergency. So look at selling the old one first. But instead of just resigning yourself, if camping is important, are there ways you can go camping without relying entirely on a new trailer? A shorter stay with old fashioned tents, rent a cabin, maybe split up and just take just some of the family on a trip while others do a different activity?

  • Reply Jen |

    I’m a camper, and I say do it. You don’t have the debt load other posters have. It’s really a minimum amount of money that you would be temporarily pulling. You clearly use the trailer enough to justify the upgrade.

    Ideally you wouldn’t be pulling from your emergency savings, but as long as you aren’t pulling everything and have a concrete plan to replace ASAP, I say go for it.

    When people I know replace campers, when they replace depends if they’re buying private party or from a dealer. Private party sales usually mean buy, then sell the old one. Dealers usually mean get a buyer for the old camper (they can take a while to sell), then buy your new one.

    Dave Ramsay often gives impractical advice. Follow the spirit, not the letter.

  • Reply Kerry |

    Honestly, eff Dave Ramsey because his whole schtick is based off a black and white worldview where you the listener are constantly in the wrong because you’re not perfect enough. Beks knows her life is secure, she can replenish the savings, and that god forbid something majorly catastrophic should happen she’s selling both campers fast. Dave Ramsey is the equivalent of a pro-ana message board, only you are starving yourself of comfort and fun because you haven’t reached his version of financial perfection.

    • Reply Kate |

      Yeah, I was here to say the same. This is why I only followed Dave Ramsey to pay off debt and ignored the other steps. I would focus on keeping your emergency fund but then also just start saving some money to just have as a cushion of cash. Then you don’t have to worry about whether it’s really an emergency.

    • Reply Jen |

      He just gives such phenomenally bad advice sometimes, it costs people money! I get that some people simply can’t handle credit responsibly. The answer is not his draconian approach of “never use credit ever”, because in the society in which we live that’s just stupid. Not utilizing credit is going to mean you have a lower credit score, so when you do get in a position where you need it….you get hosed with higher interest rates. Stuff happens, you may suddenly *need* to take out a loan because you have a home repair that cannot wait, and not enough saved to pay for it at that moment. And having bad/no credit costs you money. If nothing else, you’re probably going to get a mortgage, and you do not want to be in a position where you need one of his non-traditional lenders.

      One example is his take on cars. He constantly says go get a $1000 reliable clunker (which, thanks to cash for clunkers don’t exist. You get a clunker, or reliable car. Not both.). That’s a car you’re going to maybe get a couple years out of before the repairs cost more than the car is worth. The answer is to get the most reliable car you can with what you can afford, and not pay through the nose in interest. If you’re able to get yourself to a good credit score, you can get car loans that are less than inflation!

      The answer is not treat credit like a recovering alcoholic treats alcohol. The answer, for most people who don’t have verified shopping addictions, is to become financially literate!

      He’s horrifically out of touch millionaire, and it is truly shocking to me that not only do people listen to his advice—they pay for it!

    • Reply Leo |

      This!! You are so right. I recently started watching a view of his call-in videos on YouTube and I’m like yikes.

  • Reply Emily N. |

    I think for where your finances are at this point your decision makes a lot of sense and may have saved you a bit of money over the long term.

    As far as vehicle purchases, I’ve always kept my car until it’s at the end of its life while saving for a replacement. When I buy a “new” car, the old one isn’t worth selling any longer.

  • Reply Lisa |

    Camping is not an essential thing; it is “extracurricular,” imho, and a lifestyle/entertainment preference. I get that it’s important to you, but sacrifice is necessary to make that program work. It’s a big thing to go against your plan because you aren’t willing to go without camping for that long. It’s a slippery slope to start rationalizing emergency fund disbursements. (If you do what you would like to do, you are doing a “Dave-ish” program. That’s besides the point, though.)

  • Reply Meghan1227 |

    For me, the bigger issue is that a few weeks ago you asked if using the emergency fund to get a new pet was a viable reason to use an EF and every comment was that did not constitute an emergency.

    I think we can all agree that again, while you are free to use your money however you like, this does not constitute an emergency either. Unlike the pet situation, you are mentioning the funds were used after the fact. Why consider buying if you were not yet able to pay cash?

    I will leave with this thought, you say you have never done this before but you have thought seriously about it before (see pet post). Will this be the event that enables you to continue to use the EF for non-emergencies in the future?

    • Reply Margann34 |

      I completely agree. She as proposed using the emergency fund for two non-emergencies. She did take out money for a new camper but didn’t say how much. I am guessing $10,000-$15,000. Sure it will get put back in when the old camper sells. But how long is That? It shows total lack of financial discipline. Remember that this is a person who had had to dig out of major debt not once, but twice! Why……lack of dicipline. Some people NEED to follow Dave Ramsey to the letter because they make poor choice after poor choice leading back into debt. Becks may be one of those people. Most likely it works out just fine. But the potential for disaster is there.

    • Reply Laura |

      I think this is the key. Since you don’t have other debts, it’s not completely unreasonable to use your money this way, but combined with the earlier pet question, it shows that you haven’t decided what an actual “emergency” is for you.

      Since this is already done, oh well. But from here on, I’d decide how much you think you should have for *actual emergencies* and keep that in an account (I’d also suggest discussing with your family what is an emergency and what is not.) then, money beyond this amount goes into a savings account. That’s your buffer. Yes, it can also be used for emergencies, of course, but since you have a protected amount set aside, when something like *needing* a dog or a camper upgrade comes up, you can use the saved money that is for such purposes.

  • Reply Barb |

    To answer the question in your post about how other people fund larger vehicle purchases without dealer financing and trade-ins here is what we do…. For some quick context we had several painful years of beans-and-rice living to pay off stupid debts about 8 years ago and are debt free except for the mortgage now. Our family keeps 2 seperate accounts. The first is our emergency fund, and we never touch it, and will only use those funds if there is extended unemployment. We view this money as totally off limits. We got this fully funded several years ago, so we never add to it either, it just sits there basically dormant. We keep it in a savings account at our local credit union so it is readily available if needed. The second account is more like a really restricted slush fund. I have an auto-draft set up into a vanguard account for about $100 a paycheck, and it slowly grows (and rises and falls with the market, but I’m willing to bear that risk because it’s not my actual emergency fund). When we recently had to replace our used minivan with a slightly newer used minivan and that ‘slush fund’ money was used to bridge the gap between buying the newer used car for cash and then recovering some money when we sold the older van. We view this account as mostly off limits, and don’t account for it with our day to day finances, except continuing to fund it a little bit every paycheck. We typically have a larger expense that we use it for about every other year.

So, what do you think ?