Emergencies

Dave Says  (Christmas emergency)

Dear Dave,

We recently began your plan, and we’ve got our starter emergency fund of $1,000 in place. Is it okay to spend this on Christmas gifts if we know for sure we can replace it in January?

Mike

Dear Mike,

Absolutely not! That’s the equivalent of financial suicide. The moment you do that, Murphy will move in your spare room and bring along his brothers, Broke, Desperate and Stupid.

Everyone wants to have a nice Christmas. And if $1,000 was all the money you had in the world, I’d be okay with you spending a little bit. But the key word in “emergency fund” is EMERGENCY. Christmas didn’t sneak up on you, man. It happens on December 25 every year.

Next year, put a line in your budget for Christmas gifts. You can save a little bit each month, and by the time December rolls around you’ll have a nice chunk of change for gifts and other Christmas expenses.

For now, go out and find a part-time job. If you deliver pizzas or throw boxes over at UPS for a few weeks, you can still make enough to cover Christmas gifts for your family!

- Dave

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