❗Let's close the gap: We still need your help to raise $40,000 by April 1. Donate now
Ask Money

A "vacation bank" and savings

Chris Farrell Apr 20, 2011

Question: Sorry to bother you, but since I started listening to your podcast (Thank you!) I have become focused on having a decent Emergency fund.

I am married with 2 kids, have a job I love that pays well, and we have our own home. We comfortably put money in savings every month but I am wondering if I have a “hidden” emergency fund.

I rarely take time off of work (again, love my job) so I have 450 hours of leave in my “bank”. The max carry over is 440.

I can cash out 40 hours per year, but there is a clause allowing larger withdrawals in emergencies. I will receive the full balance if I leave my job. Can I consider the money this leave represents as part of an emergency fund? Thanks, Brian, Anchorage, AK

Answer: You’re not bothering us at all. We love questions. And it’s great to read that you’re saving every month.

My answer to your question is yes… maybe… and no. Here’s why:

Yes: You can consider your vacation “bank” part of your overall cash cushion. It has real value and I imagine your hours add up to a nice chunk of money.

Maybe: Your employer can always change its vacation policy. Companies have a lot of freedom to overhaul their approach to vacations, although most try to steer clear of too draconian a cutback to avoid hammering employee morale. Still, the risk to your “bank” acount is a rule shift that may be less generous than the current policy.

No: The message in your flush vacation bank is that you aren’t taking enough time off from work.

There’s a lot happening in the world.  Through it all, Marketplace is here for you. 

You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible. 

Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.