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Potential Backup Plans for Your Emergency Fund

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An emergency fund is a safety net that everyone should have stashed away in a savings account. When something goes wrong, and you need to cover an urgent expense, you can dip into the fund and withdraw the necessary savings to resolve it. The safety net will catch you and help you recover in a flash. 

Not only will your emergency fund help you respond to an urgent expense right after it happens, but it will also keep the rest of your financial matters in good shape. Any withdrawal you make from your fund should have no negative impact on your checking account, meaning your usual expenses should go smoothly even after you encounter a bump in the road. You’ll still be able to pay your bills on time. You’ll still be able to buy your groceries. Your budget should be completely untouched.

So, you should make it your goal to build an emergency fund as soon as possible. It should help you get through stressful situations without breaking a sweat — most of the time. 

When Your Emergency Fund Isn’t Enough

Your emergency fund will be a reliable safety net the majority of the time. However, there will be times when it won’t be enough to support you through a disaster. When is that?

When you’re building your fund from scratch, you might not have enough in your savings account to cover an emergency expense for several months. The fund will be too new to act as a sturdy safety net. 

In a similar vein, your emergency fund might not be very useful directly after dealing with an urgent expense. The recent withdrawal could dwindle your savings and leave you with a much smaller cushion to rely on — at least until you replenish the balance.

So, what should you do when you can’t rely on your emergency fund? You should consider these backup plans:

A Credit Card

If you don’t have enough savings in your emergency fund, and you’re hit with an urgent expense, you could use your credit card as a backup plan. Using a credit card allows you to cover the expense immediately and then pay down the balance when you can afford to do so. 

You should only use a credit card as a backup plan when the balance isn’t close to the limit. If the balance is too high, you risk maxing out your card when you make another transaction with it. Maxing out your credit card comes with a series of consequences, including lowering your consumer credit score. So, be careful about this backup plan. 

A Personal Loan

Another backup plan that you can consider when your emergency fund isn’t an option is an emergency personal loan. An emergency personal loan could give you enough borrowed funds to cover an urgent expense in a hurry. After the problem is dealt with, you can focus on a repayment plan. You’ll steadily repay the loan over a monthly billing cycle until everything is paid off.

You don’t have to book an appointment at your nearest bank branch to apply for a loan. All you have to do is pull out your smartphone — click to learn how to get a loan by phone in an emergency. You can also apply for one online. Basically, you don’t have to leave your front doorstep to submit your application and access your funds.


If your emergency fund is empty, you could ask a friend or family member to help you out when you’re in a financial bind. They might be willing to lend you a hand by lending you some money.

There is definitely a risk when asking your loved ones for IOUs, especially when you’re not in a position to repay them quickly. It could become a source of conflict and do permanent damage to your relationship. So, be very cautious when turning to this solution.

To avoid conflict, some people find that giving away money is easier than lending it to friends and family members. When the money is given, there is less tension surrounding the process of repayment. 

Sometimes your safety net needs its own safety net. Consider these backup plans for your emergency fund!