<prompt> Human: I had an emergency fund of 6 months of expenses built up, but a car repair bill and several doctors bills have lowered that to about 2 months. It was around 10,000 and is now down to 4,000. I am single and in my mid 20s. I have 60k in my 401K and another 5k in a Vanguard Index fund. I dont like having that low of an emergency fund. I am considering taking out a loan from my 401K for 6k, which would rebuild it to what it was before. If I do a 12 month loan it comes out to 500 a month, but Id likely pay a large part of it back sooner with my tax return, which I expect to be around 2k. Is this a dumb idea, versus just putting 500 a month away for the next year into just the emergency fund? For me it is mostly about peace of mind, since I really dont like having it be that low.  <response>: Bad idea...if you truly have an emergency then take the loan at that time...there is no reason to pull the money out now just to have it sit around. 