FMOOD 0169: Is This an Emergency, or Am I Just Bad with Money? - a podcast by Tom Merlino | Tom is inviting you to follow him on his journey to get out of debt and get into prosperity.

I've found myself doing this before. I get desperate for a few extra dollars in a particular budget month where I found myself in the red. The emergency fund is just sitting there, so I justify borrowing from the savings by telling myself that I'll just pay it back the following month. This isn't a good habit to get into, and it can turn into a very slippery slope once started.

 

When we do this, we train ourselves to use our designated emergency fund or sinking fund as a crutch. We allow ourselves to believe that our savings account is extra money that's just waiting around for us to tap into. We forget that we've already earmarked these resources for an emergency or for a sinking fund. We've already defined what the money is supposed to be there for, and we must stick to what we had designated in the beginning when the money was originally placed into the account, intentionally separate from our standard checking account balance.

 

Is borrowing from our savings from time to time better or worse than using a credit card? That's a good question. I would answer it like this. Whether we fall back on a credit card or on our savings account, we're effectively doing the same thing: we're using something else as a crutch rather than focusing on fixing our budget so that we don't need to use other resources other than what we are supposed to be using for our monthly expenses.

 

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