Should You Have Multiple Emergency Funds?

My wife and I were pretty disciplined this last year to save up an emergency fund that could cover a good five months of our expenses.  We had just about reached our goal when……BAM….we had to dip into the fund to pay for an expense.  We’ve since repaid the emergency fund, but I really don’t like the idea of dipping into it again.

That’s when I thought…would it be smart to have more than one emergency fund?

The primary emergency fund would be for the unexpected or devastating events – losing a job, large medical bill, major car repair, etc.  The secondary fund would be to cover the not so large or urgent events that seem to come out of nowhere.

Here’s why I’d consider a secondary emergency fund:

• Keeps the primary fund intact.
• Promotes focused saving.
• Helps keep us within our budget.

If there were one problem with the idea of a secondary emergency fund it would be this: what COULD you use it for?

I suppose it’d be more of a general fund that simply keeps us from having to use the larger emergency fund.  We could really use it for anything we’d regularly use the emergency fund for, but it would make us feel better – kind of like our first line of defense against unexpected expenses.

What do you think?  Is it a waste of time to keep a large emergency fund (6 months of expenses) and a smaller fund (1-2 months of expenses)?