What is an emergency fund?
Getting out of debt is a noble endeavor and sometimes, if you can believe it, you may start getting addicted to paying it off. Once this happens you may devote every penny to getting that debt down. You may even take on odd jobs or a side hustle to support your pursuit of being debt-free. Then the unthinkable happens. Your car breaks down. What are your choices?
Put it on a credit card - you have already paid every dime to your creditors
Ehh...that's about it
So, now you are back in the same situation you are trying to get yourself out of. This is where an emergency fund comes into play. An emergency fund is a separate account from your normal checking and/or savings that is to used only for emergencies and I mean only for emergencies. It is a buffer so that you don't have to put it on a credit card and keep yourself out of debt.
An emergency fund should cover 3-6 months of expenses. Most banks have hassle free accounts that you can open without check writing privileges but have a debit card attached. This is a perfect account to store your emergency fund. You should have an emergency account whether you are in or out of debt. If you are in debt, it keeps you from a further hole. If you are out of debt, it keeps you from getting into it.
A good way to gauge if you should use the money is this:
is it unexpected?
is it urgent?
is it necessary?
An emergency happens every couple of months. So, instead of thinking that an emergency won't happen, you will be prepared for when it does.