Having an emergency fund is something that you may not ever think about. That is, until you really need it. The list of things that you should save for in addition to your normal expenses can make saving in an emergency fund difficult or not as high of a priority. Having an emergency fund is absolutely crucial though. Not having one can mean financial disaster for you and your family. However there may be a few instances in which an emergency fund should not be the number one priority in your financial preparedness.

If you have consumer debt:

If you have not started paying down your high interest debt then you have a present day emergency on your hands. The interest on your debt can be eating away at your future or even be putting you behind in your goals. If you have any consumer debt, you should pay this off before starting an emergency fund.

If you haven’t started saving for retirement:

Many Americans do not have enough retirement savings. Starting young and remaining consistent in your contributions is all it takes to be on your way to retirement. Make sure you have a means to contribute regularly to your retirement before you start an emergency fund.

Your living expenses are low:

Another instance in which you might not need an emergency fund is if your expenses are already low and you have no debt. If this is the case you most likely already have some cash accumulated for the event of an emergency.

If you have liquid investments:

If you are already socking away money by investing, you could possibly have an emergency fund in that. A key component to any emergency fund is that it is somewhat liquid. You should be able to have cash within 24 hours in order for it to be considered liquid.

The peace of mind that comes with having an emergency fund is well worth the commitment that is required in order to have one at all. Hopefully you will never need to tap into an emergency fund at all but having one can save you from both financial ruin and many sleepless nights.

If you have homeowner insurance:

House insurance lets you relax when it comes to disasters at home you might not have control over. From basement flooding to roof damage, houses can become exponentially more expensive overnight. While having an emergency fund may offset the costs of these kinds of surprises, home insurance ensures that you are well-protected from the elements, as well as from break-ins and other setbacks.