Emergency Fund – to have or not to have?

Lately, I have been reading a lot about Emergency Funds and savings accounts, and whether there is a real need for them while still paying off your debt.

I personally do not have an Emergency Fund and I put every spare penny towards debt repayment. I have always thought that if there is debt to be paid off, you are supposed to throw everything towards it and you only start saving once your debt has been paid off in full. This said, a lot of personal finance bloggers have an Emergency Fund or a savings account that some of their money goes to each month. It got me thinking, is there a real need for it?

Without doubt, an emergency fund comes in handy when unexpected expenses arise. Whether it is an emergency dentist appointment or a redundancy, knowing that you have some money set aside for a rainy day is always comforting.

On the other hand, if you have debt and the interest rate is sky-high, would you not want to pay off your debt first and pay as little in interest charges as possible? As useful as emergency funds can be, the idea of paying huge interest rates but adding to the Emergency Fund at the same time is quite unsettling.

What is more, it can be hard to avoid temptation of using some of the money from the emergency fund on one of the impulse purchases as the money’s “sitting there anyway“. Unless, of course, you are extremely disciplined (which in all honesty I am not) and can forget about the existence of your emergency fund until a real emergency arises.

I would really like to hear your opinion on this, and who knows, perhaps I change my mind and set up an Emergency Fund as from next month.



  1. Hi! I had very similar thoughts when I first started out! I am doing without the emergency fund but only because I am trying to pay off my debt in 8 months, if I was working off a longer time frame I would have an emergency fund…I have got caught out (in April) and needed to re-draw from my credit card, which wasn’t fun!

    1. Hi, thanks for stopping by 🙂 I have decided to open a savings account after all, I am not going to put too much away, just a little something whenever I can. You’re doing great, I wish I could pay off my debt in 8 months, I would be over the moon! Not long now, you’ll be debt free very soon! 🙂

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