Dave Ramsey Says You Must Answer These 3 Questions Before Tapping Your Emergency Fund. Is He Right?

If you want to be financially secure and avoid credit card debt, you need to have an emergency fund. You should have three to six months of living expenses in a high-yield savings account where you can access the money quickly and easily if you need it.

Once you've saved up an emergency fund, that money is there for you to cover surprise expenses. But you don't want to drain the fund unnecessarily and have to start all over again building it back up.

To make sure that doesn't happen, finance expert Dave Ramsey recommends asking yourself three key questions before tapping your emergency fund. Here's what they are and why answering them is so important.

1. Are you faced with an unexpected expense?

Ramsey says the first key thing to ask is whether the expense is really unexpected, or is it something you should have been aware of so you could plan for it.

"Turns out Christmas happens the same time every year. (It’s Dec. 25.) And that semi-annual car insurance payment? Well, you know that’s coming too," Ramsey said. "If you’re not budgeting ahead for these expected expenses, it’s time to start. Otherwise you’ll be tempted to use your emergency fund for something that’s not an emergency. It’s just poor planning."

Ramsey is right about this, but the issue is that while you should be expecting and planning for these expenses, not everyone does this when they start learning how to budget. And the reality is, if the insurance is due now and you don't have the money, that's an emergency.

To avoid this situation, go through 12 months of credit card statements and look closely at your calendar. Make a list of irregular expenses you're going to face during the year -- everything from birthdays and holidays to car registrations and inspections and beyond. Figure out how much you'll need to spend on these expenses, divide that amount by 12, create a line item in your budget for them, and save for them throughout the year.

2. Is the expense essential?

Ramsey said the next thing to ask yourself is whether the purchase is "absolutely necessary." In other words, you do not want to take money out of an emergency fund for anything that could be considered a want rather than a need.

And he's absolutely right on this. Your emergency fund really needs to be there for you in case you find yourself in a dire situation such as a job loss or medical ailment. You don't want to face a real emergency and find yourself regretting that you took the money out for a last-minute spa day that your friend asked you to go on when you didn't have the money to pay for it.

To determine if an expense is essential or not, ask yourself if your health or long-term financial situation will be worse if you don't spend the money. If the answer is yes, then take the cash out of your emergency fund. If the answer is no, then leave the money where it is until you really need it.

3. Is the expense urgent?

Finally, Ramsey said to ask yourself whether whatever you're planning to do with your emergency money is urgent or not.

"Ever had an employer who said everything on your to-do list was urgent? Or been around a kid who needed everything right now? It's exhausting. And if you live with that attitude about your spending, you’ll soon exhaust your emergency fund," Ramsey warned. "Don’t. Do. That. Instead, avoid impulse buys and practice the art of patience whenever possible."

This advice is spot-on as well. If you do not need to make the purchase immediately, put it off until you are able to save for it. By waiting until you can afford the item without raiding your emergency fund, you'll ensure the purchase you make now doesn't cause you not to be able to buy something you really need later on.