My husband wants to blow our emergency fund while on vacation: replies VICKY REYNAL

My husband and I disagree on what to use our emergency fund for.

He wants to dip into the funds because we haven’t been able to save enough money to go on a summer holiday abroad this year, but I’m confident that if we have an emergency fund, it’s for emergencies only!

What must we do?

Having an emergency fund has practical implications and provides peace of mind

Money psychotherapist Vicky Reynal answers: First of all, I want to emphasize the importance of having an emergency fund. It’s not something everyone can achieve, but it’s an important part of financial resilience – in other words, our ability to deal with unforeseen expenses and ultimately financial well-being. Why?

An emergency fund has more than just practical implications and is not just about the resources to deal with an emergency.

It also provides the peace of mind that one can deal with setbacks and provides a sense of security and stability, which is psychologically valuable.

Giving this up – even if temporarily – is a choice that cannot be made lightly. The price you have to pay can be high: you can go on holiday, but you are afraid that if something were to happen, you would be left financially exposed and exposed.

Have you explored all other options?

Knowing that there is a pot of money sitting untouched in an account can be comforting, but as your husband shows, it can also be very tempting and an easy option to resort to compared to others.

Have you considered making significant cuts to your budget in the coming months and going on holiday later in the year; or finding a way to earn some side income – for example, by selling a few items that you would be happy to sacrifice in exchange for a vacation.

All too often I have seen clients fall into the trap of black and white thinking. So what if, instead of thinking of this as a holiday or no holiday dilemma, this year you recognize that you can’t take the kind of holiday you’re used to, but you could have a different holiday.

One with fewer days, fewer stars, closer to home, so no matter what you compromise on, it’s a cheaper holiday.

Of course, you have the freedom to jointly agree to make an exception and use part of your emergency savings this time (after all other options have been exhausted) to go on holiday. But there are some factors I would encourage you to consider before making that choice.

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Is this a pattern?

Is this a new, exceptional suggestion from your husband or is this contributing to a pattern of him trying to push the boundaries of your finances?

If he has betrayed your confidence in other ways when it comes to spending or saving, then I would be extra cautious when considering this option.

What about your personalities?

Most people use boundaries to make themselves feel safe from outside threats, but for some people, boundaries are there to keep them from protecting themselves from “getting out of control.”

If this applies to you or your partner, being flexible can actually cause a lot of anxiety. It could even create a domino effect of fewer boundaries in other areas of finance or life.

What is the context?

If you really don’t have a Plan B in case of an emergency, and relying on this fund would really jeopardize your livelihood, then the holiday can of course wait. But I would also like to invite you to be honest when assessing the risk of an ’emergency’.

Does this mean that if your job doesn’t feel very secure at the moment or your car has already broken down twice this year, you may feel that dipping into the emergency savings fund may be necessary sooner rather than later and so perhaps it is not so? is the time to be flexible on that boundary.

If you do decide to dip into the emergency fund

If you do decide to use the emergency fund, some of my tips are:

Recognize together that this can easily become a slippery slope – and is therefore something that should be avoided for the financial well-being of both of you.

Have a plan ready that details how you will replenish the emergency fund and contribute a certain amount to the fund each month for a certain number of months and cut back on any agreed-upon expenses.

Be explicit about plan B in case an emergency actually occurs. Are you going to borrow from family? Should you apply for a loan or use credit?

Consider creating a Holiday Savings Plan together so you can perhaps focus your savings efforts on next year’s holidays.

You can have a budget in mind and calculate how much you need to reduce your monthly expenses by saving enough each month (if possible) to get there.

Sometimes, breaking it down into monthly amounts and then having everyone take responsibility for earning or saving half of that money each month can feel less stressful than thinking about that one lump sum.

Do you have a question for Vicky? Email

Vicky Reynal’s book, Money On Your Mind: The Psychology Behind Your Financial Habits, is available now for £16.99.

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