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when to use your emergency savings

When to Dip into your Emergency Savings Account?

times to use emergency savings

Several people have gotten into the bad habit of dipping into their savings and depleting them as fast as they are being topped up. A sharp increase in the use of payment options such as debit and credit cards, as well as digital wallets and contactless payment options, has made it easier than ever before to spend money that has been placed into savings accounts.

While it is certainly OK to treat yourself once in a while, you should ensure that you aren’t hijacking your savings account to do so. If you currently have a savings account in place but seem to be using the funds before they can start growing, you may need to take a step back and evaluate when you should or should not be accessing these funds.

Do not deplete your Emergency Savings for these Items:

Eating Out

It’s always enjoyable to spend an afternoon or evening out with family or friends at a restaurant. However, these excursions should definitely not be funded from your savings account. If you are going to include eating out as part of your entertainment routine, this cost should be budgeted for ahead of time.

Clothing, Shoes and Toys

These are referred to as disposable consumer goods, meaning that you often end up getting very little value for the amount of money spent.

Even if your favourite clothing or shoe store is running ‘the sale of the Century,’ this should never be an excuse to dig into your emergency savings account. Again, it is recommended that you set aside a small amount in a separate account or even a basic savings jar each month to cover the cost of replacing essential clothing items or shoes.

Although every parent wants to ensure that their child has great toys, these should also be budgeted for ahead of time. If your child is old enough to help with extra chores around the house, consider having them earn the extra money needed to buy the latest toy or gaming console. In most cases, they will appreciate it far more after having to work for it than if it had just been handed to them.

Recurring Expenses

Have you run out of HP Sauce, bread and cat food? If this is the case and it is happening regularly, you may need to reevaluate your grocery budget by increasing it or cutting back on luxury items. This will help prevent you from dipping into your emergency savings account each week.

When compiling your budget, it is also essential to include items such as petrol or diesel for your vehicle. If you rely on public transport, sufficient funds should be allocated for this as well. Items such as vehicle inspections and annual licencing should also be budgeted for accordingly.


Although you may deserve a much-needed holiday (and who doesn’t these days with the high stress levels that so many people deal with?), you will be defeating the purpose of going away if you have to deplete your emergency savings account to cover the cost. You will only end up worrying about how you are going to replenish these funds when you arrive back home anyway.

As with other luxury and ‘nice to have’ items, it is recommended that you set up a separate savings account to fund your next holiday.

When it’s Acceptable to Access your Emergency Savings Account

Now that you’ve seen cases where it’s not acceptable to access your emergency savings account, here are a few instances where you should make use of it.

logbook loans for house repairs

House Repairs

Has your roof suddenly sprung a leak? Has your boiler decided to go belly up on you, or worse, has your water heater decided to leak into your airing cupboard or ceiling cavity? If so, this definitely counts as an acceptable time to access your emergency savings account. Your home will probably be the costliest item you ever purchase, so it makes perfect sense to ensure that it is kept in the best condition possible.

Unexpected Vehicle Repairs

If you are like millions of other people around the country, you probably rely heavily on your car to get you to and from work and transport children to school in some cases. As a result, it needs to be kept in good running order. This means that it’s perfectly acceptable to dip into your savings account to cover the cost of a blown out tyre, a leaking radiator or windscreen that may have cracked unexpectedly.

A Job Loss

Although it was mentioned earlier that you shouldn’t dig into your saving to cover weekly expenses, there is an exception to this – job loss. If you have suddenly been made redundant, your emergency savings can most certainly be used to see you and your family through until you are able to find alternative employment.

If you have lost your job, it is strongly recommended that you slash as many expenses as possible until you are able to find work again. For example, activities such as eating out, buying new clothing and other luxury items will need to be put on hold so that you can cover essentials like energy bills, mortgage or rent payments and transport-related expenses.

While it is traumatizing to find yourself suddenly unemployed, it can provide you with the opportunity to consider a career path change. You may also now have enough time on hand to shop around for better pricing on essential items such a household and vehicle insurance.

When it comes to funding an emergency savings account, most financial experts recommend that it be bolstered with the equivalent of three to six months’ worth of funds to cover your essential expenses. This will normally provide you with enough time to not only grieve your job loss; it will enable you to sit down, plan your next career move or even compile a brand new CV that will get you noticed by potential employers and/or recruitment agencies.

Please note: The content provided in our blog posts is for informational purposes only, and does not constitute lending advice, nor does it claim to portray the actual lending experience accurately.