My husband wants to spend our emergency fund on a holiday. How can I prevent it? Money psychotherapist VICKY REYNAL responds

My husband and I disagree about what we should 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 convinced that if we have an emergency fund, it will only be for emergencies! What should we do?

Money psychotherapist Vicky Reynal responds: First of all I want to highlight the importance of having an emergency fund. It’s not something everyone can do, but it is an important component of financial resilience; In other words, our ability to cope with unforeseen expenses and, ultimately, financial well-being. Because?

An emergency fund has more than practical implications and is not just about having the resources to deal with an emergency. It also provides the peace of mind of being able to face adversity and gives a feeling of security and stability, which is psychologically valuable.

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

Have you explored all the other options? Knowing that a lot of money is sitting untouched in an account can be comforting, but as her husband shows, it can also be very tempting and seem like an easy option to turn to compared to others. Have you considered making some big cuts to your budget over the next few months and then going on vacation later in the year? or find a way to earn additional income, for example, by selling some items that would be fine to sacrifice in exchange for a vacation.

I have seen clients too often fall into the trap of black and white thinking. So what if instead of looking at this as a dilemma about vacation or no vacation, this year you recognized that you can’t take the kind of vacation you’re used to, but that you could have a different vacation? One with fewer days, fewer stars, closer to home, so any compromise you decide on will make your holiday cheaper.

Of course, you are free to jointly agree to make an exception and this time use part of your emergency savings funds (once all other options have been exhausted) to go on vacation. But there are some factors I encourage you to consider before making that decision.

Historical patterns

Is this a new, one-off suggestion from your husband or does it add to a pattern of him trying to overstep the boundaries of your finances?

If you have shaken your confidence in other ways when it comes to spending or saving, then I would be very cautious when considering this option.

Personal allusions

Most people use boundaries to feel safe from outside threats, but for some people boundaries are there to keep them safe from themselves, to avoid being “out of control.” If this applies to you or your partner, then being flexible could cause a lot of anxiety. It could even have a ripple effect of being less limited in other areas of finances or life.

Context

Now, if you really don’t have a plan B in case of an emergency, and dipping into this fund would really compromise your livelihood, obviously the vacation can wait. But I also invite you to be honest when evaluating the risk of an “emergency.” Does this mean that if your job doesn’t feel very secure right now or your car has already broken down twice this year, then you may be feeling that dipping into the emergency savings fund might be necessary sooner rather than later and Therefore, it may not be necessary? It will be time to be flexible in that limit.

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

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 with details on how you will replenish the emergency fund and contribute a certain amount each month for a certain number of months to the fund and cut agreed-upon expenses.

Be explicit about Plan B should an emergency actually occur. Will you borrow from your family? Will you need to take out a loan or use credit?

Consider creating a holiday savings plan together that may help you focus your efforts on saving for next year’s vacation. You can have a budget in mind and calculate how much you would need to reduce your monthly expenses (if possible) to save enough each month to get there. Sometimes dividing it into monthly amounts and then each taking responsibility for earning or saving half of that money each month can be less burdensome than thinking about a lump sum.

Do you have any questions for Vicky? Email vicky.reynal@dailymail.co.uk.

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