<prompt> Human: Im in a a bit of a hairy situation. Our furnace is 18 years old and the induction motor seized when we turned on the heat for the first time this fall. The HVAC repair guy got it working but advised we either replace the motor 580 or get a new system, as their are also cracks in the motor housing that could lead to carbon monoxide leaking.Im leaning toward replacing the furnace rather than fixing it for a couple reasons. First, the furnace is old. 80 gas furnaces typically last 16-20 years, and this one is probably ready to give up the ghost sooner than later. If we put 580 into repairing the induction motor, their are other more expensive parts that could break soon after. Second, we had a new AC compressor and coil installed earlier this year. A new furnace would save us money on both heating and AC bills, and we would be eligible for approximately for 300 federal tax credit and 350 credit from the power company. Third, while our carbon monoxide detector hasnt shown any CO in the house, Im getting nervous about it because we have a 8 month old son.The best quote Ive gotten for a decent furnace is 4200. Minus the credits, net cost would be 3550. Im considering a couple of options to pay for it, if we chose to go this route. Option 1 - Use emergency fund. We have 7000 in savings. However, my wife was let go from her job a couple months ago and her income is far less in her new position. Compensation is based on how many clients she can enlist in a service. Shes making progress, but shes only brings home about 250 per month after we pay for day care. For this reason, its possible we may need to draw from our emergency fund if she cant get more clients in the near future.Option 2 - Secured loan from our credit union. The CU would hold our shares account as collateral and release it upon repayment. Rate is 5.Option 3 - Finance through the HVAC company. Id rather not chose this option as I believe these are typically high interest. Doesnt seem worth it.Option 4 - Use credit card. This would be the last option. Additional details. We have two car loans with balances of 1,170 147 per month and 1,090 229 per month. The first is scheduled to be paid off June 2014 and the second will be paid off March 2014. My wife just paid off her students loans and mine 6000 have been deferred as I work full time and am also working on a PhD. Tl;dr - We need a furnace 3550 and I dont know whether I should use part of the emergency fund 7000 for it, when theres the potential that we will need emergency funds for living expenses due to wifes lower income. We have the option of paying with a secured loan through our credit union 5 interest for 24 months. Unsure whether the entire savings account is held as collateral or only an amount equal to the loan. We continue to earn interest 0.75 on our savings account while the loan is in repayment.Edit: Thanks everyone for the outstanding advice. I am going to sleep on what to do. Im leaning toward purchasing another CO detector to place on the lower level of the house current one is up by the bedrooms, pricing a new draft inducer motor, and figuring out if I could replace it myself.  <response>: Where I live, I think they offer zero-interest loans to pay for energy efficient appliances. Maybe give your gas utility a call and ask if there are any loan programs in place? 