I Never Tap My Emergency Fund Until I Do These Things First

As a parent, homeowner, pet owner, and vehicle owner, I'm no stranger to emergency expenses. In fact, even as I type this, I'm gearing up to take my dog to the vet's office for follow-up testing on an issue we're monitoring. I have no idea what it's going to cost me, but even with pet insurance, I can expect to be shelling out something.

Meanwhile, earlier this week, my daughter needed an urgent care visit that will likely result in a several hundred dollar bill. And while I haven't had any home- or vehicle-related expenses pop up so far this month, well, March isn't over.

Clearly, emergency expenses can arise for anyone at any time. So it's important to be prepared by having a solid emergency fund.

But because I've worked really hard to build my savings account balance, I won't just rush to raid my emergency fund every time an unplanned bill comes up. Instead, I typically do these things first.

1. See if there's a less expensive alternative my regular paycheck can handle

In some cases, a given expense I encounter may be non-negotiable. Today, for example, my dog needs to get an x-ray. I can't just ask my vet to use their hands to feel around my dog's body in lieu of an actual scan, so whatever the cost ends up amounting to, so be it.

But in the past, I have been able to find cheaper alternatives that my regular paycheck could handle, thereby sparing me from having to raid my emergency fund. Not so long ago, my fence was damaged during a storm. Paying someone to fix it probably would've forced me to take an emergency fund withdrawal. Instead, my husband bought the parts he needed, rallied some friends, and did the work himself.

2. See if I can work more

As a freelance writer, I have the opportunity to take on extra work to boost my income. So before raiding my emergency fund, I'll always try to pick up extra projects to cover the cost of the item in question, even if that means giving up a lot of sleep and downtime.

Now sometimes, that's just not possible. Last year, we spent $12,000 to replace the heating system in our home. There's no way I could've boosted my income to the tune of $12,000 within a single month to cover that cost outright. But for smaller expenses, working more during the month sometimes does do the trick, such as when it's a $300 medical bill.

3. Put the expense on a credit card and pay it off by the time the bill comes due

When surprise bills arise, I often pay for them on a credit card rather than just withdraw the cash from my emergency fund. Why so?

With a credit card, I earn cash back or rewards on my purchases. So the way I see it, if I'm going to get stuck with an extra expense, I might as well get a little money back on it. What I'll then do is dip into my emergency fund as necessary to pay off my credit card to avoid accruing interest.

This system won't always work, because sometimes, you'll pay more to charge a given expense on a credit card. This can happen in the context of home repairs, where a contractor's price will be higher if you use a credit card. Last year, when we replaced our heater, there was no surcharge for using a credit card. So we put that expense on our card and got the cash back, and then paid the bill in full out of emergency savings.

Don't make raiding your savings your go-to option

It's important to have money in the bank for surprise expenses. And if you have a fully loaded emergency fund -- one with enough money to cover at least three months of essential bills -- then you're ahead of the game. That's because as of last year, 63% of Americans didn't have enough cash in the bank to cover an unplanned $500 bill, according to SecureSave.

But it's also important to know when to tap your emergency fund. And in some cases, it may be possible to seek out a lower-cost alternative or increase your income to cover the expense you're facing. Even if you're not a full-time freelance worker like I am, if you don't want to raid your emergency fund, you may be able to drive for Uber or DoorDash or a similar service for a month to scrounge up the cash.

And remember, if you have the money in a savings or checking account to cover your unplanned bill, it does not pay to go into debt to deal with that expense. But if you can put it on a credit card, get cash back, and then use your savings to pay off the balance in full, why not go that route and snag a little benefit?