I actually have two emergency funds. One is for what I consider short-term emergencies, and one is for long-term emergencies (like losing my job, a hurricane destroying the house, etc.). The short-term fund is what I use when sort-of-unexpected bills pop up, or for replacing big-ticket items.
For instance, I’m going to need new tires soon. My tires are the originals on my car, and they have 45,400 miles on them now. The tread is starting to look a little thin. When I get back from break, I’ll probably take care of that.
Another example: last month, I went to the allergist and got tested, since I’ve had a lot of problems this winter and had two sinus infections back-to-back. I didn’t think too much about how much it would cost. The allergist is an approved provider for my health plan. I have a $500 deductible, of which about $100 was met.
I got the explanation of benefits the other day, and the good news is, now my deductible is met! The bad news is, I owe the allergist about $400 at once! That will definitely have to come out of the short-term fund.
My house needs to be painted pretty badly. I should have enough saved up in the short-term fund by summer to get that done. I really don’t want to touch the long-term fund unless I absolutely have to. I want to have at least 6 months worth of living expenses in there, and right now I have about 1 1/2 months. Once I get the car paid off, I can do a little more long-term saving.