Using the Emergency Fund

CHAPTER 3, LESSON 3

NAME DATE
Hamza alfakeeh 4/12/2023

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 No

2. Explain your reasoning.

it costs too much, and her still is still working so its not an emergency

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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?
Yes No

4. Explain your reasoning.

because its an unexpecte even and he wasn't planning for it

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 No

6. Explain your reasoning.

this is urgent and is about emotional feelings. its not emergency, so she should stay discpline and
not use her emergency

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?

Yes No

8. Explain your reasoning.

that is an emergency and he can use his emergency fund to get a new one since he needs it to get
in touch with friends and family

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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 No

10. Explain your reasoning.

its a backpack, just get anything cheap, what kind of backpack thats $225 ?

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 Using the Emergency Fund
CHAPTER 3, LESSON 3

DIRECTIONS
Answer 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?

emergency is when I crashed a golf cart, and I had to call my dad to pay for the repairs

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

ever since I have been saving for emergency

13. How would having a $500 emergency fund relieve the stress caused by the emergency?
I wouldn't have to worry or get a loan of money

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14. Why do you think it’s hard for many people to save and keep an emergency fund?
cause they usually spend it all and they dont plan for their money.

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

if its an expected event that happened without you planning for it.

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

losing your job, lost phone, broken laptop

17. Why should your emergency fund be separate from any other savings accounts?
because its for emergencies only, like when covid happened, people who had emergency funds
were in a better place other than people that didn't have emergency fund.

18. What should your first goal be after you’ve used part of your emergency fund?
multiply that number by three or six to get an idea of how much you should save for your
emergency fund.

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