4 ms·
There’s a ton of comments on this article that I think are much more nutso. But this is the comment I’m going to reply to, cause people who keep emergency fund
by nmcfarl 11y ago
There’s a ton of comments on this article that I think are much more nutso. But this is the comment I’m going to reply to, cause people who keep emergency funds are probably open changing their mind via reason.
Touching your 6 months emergency expenses fund is completely against the point. The reason you have this cash is for out of the blue, hit by bus kind of events. You need it when you least expect it
If you take your TV out of it you no longer have it - and this fund becomes nothing more than a general savings account. The kind of thing that drops low right after you buy a TV, or a car, which from my personal experience is exactly when bad things happen. And often bad things require cash on the barrelhead, not just credit cards.
So don’t do this. Either save in a slush fund for your TVº, or put it on a credit card, but don’t take it out of your emergency fund and still call it an emergency fund - 'cause it’s not going to be there for you in an emergency.
º or my personal favorite: a throw away, but named, savings account. (Like CapOne360, née Ing Direct, offers.)
- dragontamer 11y agoWell, its the reality of the situation. A typial 6-month Emergency fund is somewhere on the order of $15k, depending on where you live. This is more money than the typical American 40 year old has saved up their entire life (including retirement accounts) http://www.fool.com/investing/general/2015/05/17/americans-average-net-worth-by-age-how-do-you-comp.aspx http://www.fool.com/investing/general/2015/05/17/americans-a... If you manage to have $15k, and you are making a big purchase, do use it before you start using a credit card. Now of course, if you have $15k "Emergency use only" PLUS $5k "discretionary", then yeah, spend the money from your discretionary account first.
- 2muchcoffeeman 11y ago> This is more money than the typical American 40 year old has saved up their entire life (including retirement accounts) Seriously? I feel like an old man. I had that much money saved in less than a year from starting my first part time coding job. In fact the whole not saving money thing seems a bit strange to me. My monthly cost have remained relatively stable for almost a decade while my salary keeps going up.
- nimblegorilla 11y agoPeople able to save 15k of cash usually have decent credit ratings and can get 0% financing for most things.