Last week I got a letter in the mail from the bank saying that we owed them $1373.00 for our property taxes. When we got the mortgage last year we asked to have the property taxes included in our bi-monthly mortgage payment. However, for some reason, the bank miscalculated how much we would owe- by $1373.00!

The bank has given us 2 options: 1) pay the $1373.00 outright, or 2) absorb the amount into increased mortgage payments until it has been paid off (in about a year).

We contemplated dipping in to the emergency fund and paying the amount outright. But there is not enough $$ in there, and I am not sure this qualifies as enough of an emergency. I think something qualifies as an emergency if the only other alternative would be to go into more debt to cover this expense. This is not really the case. So we have decided to take option 2 and accept the temporarily increased payments.

What do you think? When is something enough of an emergency to dip into the EF?


  1. mariam said...
    Hmm. I think an emergency is something that is health related or something that impedes you from making money - such as a car breaking down and you can't get to work.

    I think you did the right thing. However, can you argue that the bank made the mistake and have them absorb it? You gave them instructions and they miscalculated. How's that your fault?
    Anonymous said...
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    four.pillars said...
    I think you did the right thing.

    Good question about what exactly constitutes an emergency.

    Thicken My Wallet said...
    I think you did the right thing since using the emergency funds would not have reduced your debt and not improved your situation.

    I would classify an emergency as any instance where you have to use the fund or you couldn't live/put food on the table/pay debt.
    Angie said...
    Would it have made sense to propose paying half of it with your emergency fund and then the other half in increased payments? I am just wondering here.

    Also, if you increase your mortgage payments, does that mean that you'll be paying more in interest? I don't get it.

    Btw, why do you call yourself a wooly?
    Wooly Woman said...
    Thanks for all your great comments! I am going to phone the bank branch today- the telephone banking people suggested I may get compensation from the branch since it was their mistake. I am not holding my breath but it doesn't hurt to try.

    Angie, we call ourselves Woolys because of my husband's last name. It is Ukrainian and Wooly is his nickname. Also, it is a play on words since once of my hobbies is spinning wool. A friend suggested the "Wooly Woman" and I loved it so much I immediately adopted it.
    krystalatwork said...
    Good luck with talking with the bank! You're good at that kind of stuff anyway. :) Let us know how it goes!
    Louise said...
    I hope you get a good response from the bank, it was thier mistake and you should not be penalised for that so good luck.

    I think an emergency is an unexpected essential expense that can't be delayed, a health problem like my hubbys broken tooth or a living essential like jw's plumbing.

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