You're cranking along, throwing money at your debt - making progress and all of a sudden, your furnace breaks!  

Have you ever borrowed money from your kid's savings account?

That's why I stress the importance of having some savings before and during your debt payoff. But don't beat yourself up if you have to dip into that savings; that's what it's there for!

"Should I be saving money while I'm getting out of debt?"

I wrote about that in this article, but I'll tell you a bit more about how we dealt with emergencies while we were getting out of debt - and we had quite a few of them!

1. We set up an initial $500 in an account for emergencies. Eventually we built that up to $1000.  When you do have to use that money, you need to replace it quickly, which means less going toward debt reduction until you have a cushion again. 
2. Where you can, set up a payment plan. One year we owed over $13,000 to the IRS, so we set up a monthly payment plan.  While this was adding on another debt, it allowed us to stay on track with the existing plan we already had in place.  
3.  We used our existing Care Credit account to take advantage of 0% interest when we had medical expenses for our dogs.  Make sure you calculate the new payments to align with the expiration of that low interest or else you'll owe for all the interest dating back to day of purchase!
4. PAUSE - and get creative.  Often, emergencies are not life or death, you have some time to breathe and think about what you are going to do.  I can't encourage that enough.  Take your time to find what the best solution is and get creative!  Look for options that might not obvious at first but see where you can adjust to lower your financial impact. 
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