Do You Have an Inconvenience Fund?
We all know that it’s important to have an emergency fund. If you have one, you’re much better off than you would be without one because it gives you a bit of a buffer in life.
But there’s more to life than the two extremes of regular expenses and emergencies. So, do you have an inconvenience fund as well?
An inconvenience fund is used for those pricey things that occur at unpredictable intervals, but aren’t really true emergencies.
Financial inconveniences include things like the washer or dryer kicking the bucket, running over some debris with your car and getting a flat tire, your pet taking sick, etc.
Some people just make their emergency funds extra large to cover these kind of expenses instead of having a separate fund (even if that separation is just on paper.)
I like to have completely separate funds though for psychological reasons. I don’t want to get in the habit of using my emergency fund for things that are just expensive inconveniences.
Having separate fund allows me to take care of life’s pricey inconveniences without violating the sanctity of my emergency fund — or using it and then not having it available when I really need it.