Don't Rely on Your Emergency Fund to Cover These 4 'Surprise' Expenses

If you want to avoid credit card debt, you need to have a plan for covering surprise expenses. Typically, that means keeping money in an emergency fund that you can rely on if something unexpected occurs.

But, while an emergency fund in a high-yield savings account can be important to pay for things you truly do not expect to need, there are some things people often pay for with their emergency fund that really should come from other sources. While these expenses may be unpredictable, they aren't really surprises.

Here are four examples of things you should be saving money for elsewhere, so you don't have to turn to your savings account to cover the costs. 

1. Home repairs 

The Bureau of Labor Statistics reports that mean spending on home maintenance, repairs, insurance, and other expenses was $2,335 per consumer unit in 2021. The reality is that home maintenance and repairs are not optional expenses for homeowners -- and they aren't cheap. 

It's inevitable you're going to have some costs as a homeowner each year. These repair and maintenance expenses should not come as a surprise. You may not know exactly when your fridge will go or a new roof will be needed or your air conditioner will go on the fritz, but you know things like this will happen. To be ready, you should regularly save about 1% of your home's value in an account earmarked just for routine home repairs.

2. Auto repairs 

Your car also isn't going to stay perfect forever. You're going to need to repair it and maintain it. Again, you won't know when new tires will be needed or when the brakes will have to be replaced or when your transmission will go. But no one who has ever owned a car for any length of time can claim to be surprised by the fact there will be some costs associated with keeping an automobile running.

To be sure you're ready, have a dedicated auto repair fund you put money into for when things go wrong with your vehicle. About $600 to $700 per year is a good amount to aim to put into this account for routine maintenance and so you're ready for major repairs. 

3. Holiday and birthday costs 

Holidays and birthdays are not emergencies. They are predictable events you need to be ready for. You don't want to disappoint your kids or other loved ones by not being able to celebrate these big occasions. So, budget for them throughout the year and put money into a dedicated savings account to cover them.  

The typical spending on Christmas alone comes in at close to $900 for most American households, so figure out what you usually spend for special occasions and start saving for the costs each month. That way, when the event rolls around, it won't feel like an emergency you'll have to tap your account for.

4. Doctor visits 

Finally, you should expect that at some point during the year, you or someone you love is likely to need to see a doctor -- which can lead to a copay, coinsurance costs, and missed work time. You may not know when, but you should be prepared for this eventuality with the money needed to cover out-of-pocket costs.

By being ready for these "surprise" but not unexpected expenses, you can have a lot more peace of mind -- and you can keep your emergency fund for true emergencies that you genuinely have no way to plan for.