Comments on: Your Emergency Fund Is So Big…

By: Morgan at TheDebtDance.com

Morgan at TheDebtDance.com — Thu, 01 Jan 1970 00:00:00 +0000

I have a lot of trouble with emergency funds because i cannot define an emergency. Is the washer breaking down an emergency, new brakes for the car? We have a great deal of debt that we are climbing out of and emergency funds for us seem to evaporate because every day occurrences become emergencies. I wonder if, at my age, 53, having safety nets (e.g. a credit union line of credit for $1,000) for emergencies is a better bet and focus on getting rid of our debt.
Suggestions welcome.

By: Lazy Man and Money

Lazy Man and Money — Thu, 01 Jan 1970 00:00:00 +0000

In this market it’s probably not so smart to go with the HELOC-only emergency fund. Still I think if you are diversified in a number of other investments that you can liquidate in a few days, it might still work out.

Nowadays, I have a bit of an emergency fund – it’s more savings for a future house, but it works as an emergency fund.

By: PT

PT — Thu, 01 Jan 1970 00:00:00 +0000

@AJC – As long as those “assets” are liquid or quickly converted, I agree. But I’m not counting on my 401k (a great asset) for emergencies.

@Shanti – I’m jealous. We’re still a few months away from being rid of our bad debt.

@Mike – You should do a quick post on your change.

By: Shanti @ Antishay

Shanti @ Antishay — Thu, 01 Jan 1970 00:00:00 +0000

This is a great post. My emergency fund right now is so small! But I am very close to being debt free (!!!!), at which point it will begin to grow rapidly. Thank you for this post… I need to forward it to my boyfriend whose fund is most definitely too big

By: AJC @ 7million7years

AJC @ 7million7years — Thu, 01 Jan 1970 00:00:00 +0000

Don’t need one if you have enough assets behind you, a LOC (just in case … actually, I use mine for stock investments, but would cahs out in an ‘emergency’), and you obey the 20% Rule on your own house.

By: Four Pillars

Four Pillars — Thu, 01 Jan 1970 00:00:00 +0000

Thanks for the link PT.

Interestingly enough, my thoughts on an emergency fund have changed a bit recently. The Canadian government introduced a new type of savings account where you can save money and any income etc are tax free. Taxation on interest from emergency funds was one of my main arguments against having an emergency fund.

Mike