Comments on: Where I Put Our Emergency Money

By: Ron

Ron — Wed, 30 May 2007 17:29:15 +0000

Depending on credit in an emergency should be your last choice. Cash in a protected account must be your first line of defense if something terrible happens. What could happen? A major injury that ultimately causes you to lose your job. It could take months for everything to settle and have any insurance policies in place kick in. It could take many more months before you could obtain other work, if ever. Should something like this happen, how long do you think it will be before your creditors start calling those loans?

If you don’t have money saved back for this kind of emergency you are hurting your family.

Ron

By: brody

brody — Thu, 10 May 2007 00:01:03 +0000

Emergency money should not include anything prone to inflation like paper currencies. You shouldn’t hold cash, because that is the first thing that will be worthless when the economy collapses. Instead, invest in precious metals such as platinum, gold, and silver. These investments do not lose value to inflation, are easy to store/conceal/transport, and will last forever. Their are different ways to invest in gold or silver, but I recommend holding the physical metal, or opening an offshore digital gold currency account.

By: Tim

Tim — Mon, 30 Apr 2007 16:08:17 +0000

e-funds depends on your risk situation. if you are in a risky career field, you might opt to have and boost an e-fund for income disruptions. if you are in a riskier lifestyle, you might opt to have and boost an e-fund for medical/repatriation/etc. if you are in a riskier time for things breaking, you might opt to have and boost an e-fund for repairs and/or replacements. if you are in an area prone to riskier climatic changes, you might opt to have and boost an e-fund seasonally.

it’s all situationally dependent. moreover, for income disruptions, you will not need the entire e-fund immediately, so est. maturities or liquidity periods allows you to access funds without having everything in cash.

e-funds are also like insurance, you only need it when you need it. b/c no one has a crystal ball with which to see 20/20 into the future (if you do, let me know), e-fund is a safety precaution. now people might depend on a HELOC, but hey if you need cash now a HELOC takes time and doesn’t work on the weekends or whenever the banks are closed.

By: Q

Sun, 29 Apr 2007 23:33:05 +0000

Hi Sun,

Yes, if I borrowed money from my Home Equity Line of Credit in case of emergency, I would have to pay interest. The thing is, in 6+ years of marriage, we’ve never had an emergency. I am not a fool to think that an emergency could not occur. It’s just that they don’t occur very often. So I choose not to save up the $10,000 or more dollars in cash that an emergency fund would require. I just personally feel better keeping as much of my money invested in stocks as possible. For those of you that keep emergency funds, it’s a good idea for you, and it sets your mind at ease. This is wonderful! It’s just not for me.

My Home Equity LIne of Credit is just that – a line of credit that’s always available to me. I have a checkbook that I can write checks out of. So if an emergency comes up, I just write a check.

By: majic

majic — Sun, 29 Apr 2007 12:02:52 +0000

In the UK, you can set up an cash ISA (individual savings account) which works much like a savings account, but you don’t pay tax on the interest. However, you can only put £3000 a year in, and if you take any money out during the tax year, you lose interest on that.

These accounts pay something in the region of 5-6% maximum, so although it’s not a great deal it’s better than many accounts. It’s a good solution if you’re not likely to need to dip into the fund regularly, so I would only use it as a last resort.

You can also get stock & share ISAs, something I’ve not investigated too thoroughly. IIRC it’s much the same deal as a cash ISA but with a limit of £7000 of stocks put in a year.