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Thread: Emergency Fund

  1. #1
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    Default Emergency Fund

    I'm not talking about the cash thread, I'm talking about being able to cover your bills when you can't work for 6 months.

    6 months is minimum, IMO. I know it's hard for a lot of people to build such an emergency fund, but just like prepping, start small. You don't have to fully fund it immediately. It's too late for this crisis, but after seeing how many people are going to default on everything because they live paycheck to paycheck and don't have an emergency fund, it's important to realize how important this concept is.

    It takes discipline to put money into the fund, and then not touch it when that shiny thing comes along that you want.

    I struggle with the having the discipline to not touch my emergency fund, so I keep it in a Synchrony bank high yield savings account that I can't easily draw from. I would have to jump through transfer hoops that dissuade me from tapping the fund for frivolous purchases, but still accessible enough that if I needed to tap them for an emergency, I can.

    Similar to starting small with prepping, try putting 10 dollars/week aside. Skip a box of ammo. Skip eating out once/month. Skip that streaming service for one show. Skip that starbucks. Etc etc etc. When you really analyze where you're spending your money, I bet most people can come up with 100/month that they could divert to an emergency fund.


    Let's hear your ideas and strategies for saving for and not touching an emergency fund.
    Life has a melody.

  2. #2
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    Default Re: Emergency Fund

    I know that is the classic advice. I canít disagree with it either. But it simply isnít practical for many people.

    EVEN IF you have the funds to do it, holding that much cash instead of having it work for you is expensive.

    An alternative approach is to have enough cash for one month and to keep open enough credit to cover 5 months, especially in the form of 0% offers. I can get a 0% offer for at least 18 months right now, from at least 5 different companies...and all my credit lines are large enough to cover the 5 months of expenses.

  3. #3
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    Default Re: Emergency Fund

    Quote Originally Posted by free View Post
    I know that is the classic advice. I can’t disagree with it either. But it simply isn’t practical for many people.

    EVEN IF you have the funds to do it, holding that much cash instead of having it work for you is expensive.

    An alternative approach is to have enough cash for one month and to keep open enough credit to cover 5 months, especially in the form of 0% offers. I can get a 0% offer for at least 18 months right now, from at least 5 different companies...and all my credit lines are large enough to cover the 5 months of expenses.
    Another good idea, thanks! Yeak "work for you" is why I at least have it in the high yield savings. It's better than nothing and I've contemplating "doing more" with it. But I'm trying not to touch it.
    Life has a melody.

  4. #4
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    Default Re: Emergency Fund

    It takes discipline to put money into the fund, and then not touch it when that shiny thing comes along that you want.

    No , it takes a really bad wake-up experience. When I got hit 32yrs ago , I had about 2yrs with no income and very few legal options. I was also in the worst possible financial situation beforehand. But with the help of a few good friends , I got by.

    Now , thanks to experience (IRA losses aside) I'm in the best financial situation I've ever been in. Between cash on hand , checking , savings , I could get by for 2-3yrs without selling any toys , or until Social Security if I'm smart.
    I don't speak English , I talk American!

  5. #5
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    Default Re: Emergency Fund

    i just don't use my bank account as my wallet. I spend when the time is right as best I can. i have been loose with my money the past 5 years because I'm not getting any younger, but I still keep my monthly bills to nothing more than taxes, utilities, and food. I have a good size cc bill coming due, but that is all going to end starting now.

  6. #6
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    Default Re: Emergency Fund

    Quote Originally Posted by abner13 View Post
    No , it takes a really bad wake-up experience. When I got hit 32yrs ago , I had about 2yrs with no income and very few legal options. I was also in the worst possible financial situation beforehand. But with the help of a few good friends , I got by.

    Now , thanks to experience (IRA losses aside) I'm in the best financial situation I've ever been in. Between cash on hand , checking , savings , I could get by for 2-3yrs without selling any toys , or until Social Security if I'm smart.
    Hopefully this is a wake up call for many.
    Life has a melody.

  7. #7
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    Default Re: Emergency Fund

    I got sideways with he tax man a couple of years after I left USAF. I swore it would never happen again. I claim zero/zero on the W4, and anytime I get a raise, I roll that amount into withholding . End of year, I get a large check that pays for emergency repairs, emergency trips, or straight into savings.
    Having a wife that is very frugal, and extremely good at managing money makes my contribution seem minuscule. We are ok now, but it hurts looking at my 401k.

  8. #8
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    Default Re: Emergency Fund

    That "stimulus" check that may be coming soon would be a good place to start. I'm already looking at a minimum 2-week shutdown, but no waiting week for UC and food/household goods on hand will help cushion that small financial hit. My hope is to weather whatever this is without touching any "free money" that I'm sent so I can add that to what I already have for "emergencies".

    Of course, when those checks arrive, there won't be a flatscreen to be had at the local Walmart.
    Attention NRA Life and voting members - LPRGCFRANK running for NRA board of directors

  9. #9
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    Default Re: Emergency Fund

    I can sympathize with the idea of looking at a 3-6 month emergency fund sitting in a savings account, even a high-yield one, and feeling like you want to do “more” with it. Ultimately, an emergency fund is an insurance policy not an investment. Imagine if you had your 3-6 month emergency fund in the stock market a couple weeks ago. Just when you needed it most it would’ve taken a big hit.
    ďA Republic, if you can keep it.Ē - Benjamin Franklin

  10. #10
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    Default Re: Emergency Fund

    Quote Originally Posted by JustinHEMI View Post
    Hopefully this is a wake up call for many.
    I consider it unlikely. The impending government handout will dissuade many from taking any responsibility for themselves.

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