Using the Emergency Fund

CHAPTER 3, LESSON 3

NAME DATE

DIRECTIONS
Read the following scenarios and answer the questions to determine if they would be considered an emergency
and why.

Scenario One
After two years of working and saving, Megan just bought her first car. She’s super excited
and ready to load up all her friends for a ride. The third day after she bought it, she stops at a
coffee shop on the way to school. When she comes out, she sees that someone has backed
into her car in the parking lot. The back bumper has a large dent in it, but nothing else seems
to be damaged.

Megan is incredibly frustrated, especially since she hasn’t even been able to show off her
car to her friends yet. Eager to get her car looking great again, she calls around for repair
estimates and finds out that replacing the bumper would cost around $475.

1. Should Megan use her emergency fund to replace the damaged bumper on her
new car?
Yes O No

2. Explain your reasoning.

It can be unexpected, but it is not really urgent because the car is working well.

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CHAPTER 3, LESSON 3

Scenario Two
Charles uses his phone all the time for texting, streaming videos, and checking social media.
His bill is usually manageable, and he’s always been able to work it into his budget. But
this month, his cell phone bill is higher than normal—$398! Yikes! In the past, his bill has
always been around $80–100. He calls the phone company and finds out he’d accidentally
been streaming on his data plan instead of on Wi-Fi. He was charged extra for the extra data
he used.

The phone company won’t change the bill since it was Charles’ mistake. If he doesn’t pay
the bill on time, he’ll get a late fee, which would be an extra $30 plus interest!

3. Should Charles use his emergency fund to pay off this unexpected bill?
O Yes No

4. Explain your reasoning.

Yes, because if he doesn't pay it fast enough he needs to pay for the late fee.

Scenario Three
Maxine and her friend Alice share a love of listening to music from England. They spend
plenty of sleepovers listening to their favorite bands and are always sharing new songs or
artists with each other.

One day, Alice excitedly tells Maxine her dad bought her tickets to a huge music festival in
England where some of their favorite bands will play. Plus, she has a ticket for Maxine, and
Alice’s dad said he’ll cover half of Maxine’s airfare. The other half is only $412. Maxine feels
like this is a once-in-a-lifetime opportunity.

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5. Should Maxine use her emergency fund to take this super rare opportunity?
Yes O No

6. Explain your reasoning.

No, because it is not a real emergency and it is just and opportunity.

Scenario Four
Lance is hanging out at a summer BBQ with a group of friends. While he and several buddies
are in a deep discussion about the latest movie they saw last night, a water fight breaks out
behind him. Without warning, he’s doused from head to toe with a bucketful of water. And
his phone is in his pocket.

After chasing off the troublemakers, he checks his phone and discovers a black screen—and
it won’t turn on. After trying all the tricks to dry it out, he takes it into a repair shop and is told
his phone is a goner. While he uses his phone for social media and to watch movies, he also
thinks it’s a necessity in case he needs to get in touch with his friends and family.

7. Should Lance use his emergency fund to purchase a new phone?

o Yes No

8. Explain your reasoning.

Yes, because he didn't know that was going to happen, and really needs it to contact with his family

and friends.

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CHAPTER 3, LESSON 3

Scenario Five
Sarah’s getting ready to head back to school after an awesome summer break. She bought
a new planner, has her schedule all set, and has all the supplies she needs for the new
school year.

The day before school starts, the zipper on her backpack gets stuck, and she has to use a
knife to cut it open. Now that her backpack is useless, she sets out to buy a new one. Sarah
actually thinks this is perfect timing because she’s had her eye on a specific backpack for a
while, and now it’s on sale for $225.

9. Should Sarah use part of her emergency fund to buy this backpack?
Yes O No

10. Explain your reasoning.

No, because she broke it and she can use other backpacks that she has.

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CHAPTER 3, LESSON 3

DIRECTIONS
Write your answers to the following questions, and be ready to discuss your answers with the class.

Now, take some time and think through the following journal questions. Remember, it
can be hard to imagine the stress of an emergency when it’s not actually happening. But
emergencies are so much harder to face when you’re not prepared financially.

11. What’s an emergency you’ve experienced or seen someone experience?

I've seen someone needing money for the hospital, but didn't expected to use money in there

so they brought money from the emergency fund.

12. How did that emergency affect other areas of life?

Didn't really affect other parts because it was a money that was thinking as it was not there.

13. How would having a $500 emergency fund relieve the stress caused by the emergency?
It can help me to not worry and to my budget to be still stable.

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14. Why do you think it’s hard for many people to save and keep an emergency fund?
Because there is many places where we use our money and not only because we want it

but because we need it.

15. How would you determine what a true emergency is?

If it is really necessary right now.

16. List some scenarios you would consider to be emergencies.

Car accident, someone being in a serious health problem and etc.

17. Why should your emergency fund be separate from any other savings accounts?
Because the emergency fund is for the unexpected things and is not for the things that

you were planning to happen.

18. What should your first goal be after you’ve used part of your emergency fund?
To save it again and try to not get into unexpected things.

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