Yet many of those same families don't bat an eye when taking out loans for nicer cars than they actually need, maxing out the amount of mortgage they can afford, buying the latest TV or game system on credit, etc..

I don't underestimate how hard it is to save, but also many people are perfectly happy buying more than they need to maximize what they can do with their income in the short run..

Also: any family should be saving for retirement, childrens education expenses, etc. anyway.. so long as the first-level pool is liquid enough to support emergencies such as this, it should work as well. Might have to work another year when older, do some sort of side job, or take some other cuts, but point stands