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Why Doesn't Anyone Talk About An Emergency Fund?

mustsavemore
mustsavemore   |     |   63 posts since 2013

For all the talk on CDs and bank accounts and savings, why doesn't anyone bring up the issue of having an emergency fund?  I don't have one although I have intended to over the past decade, but it seems like a good topic nevertheless.  How much do you keep, and where?



Answers
paoli2
paoli2   |     |   2,148 posts since 2011
An Emergency Fund is not something you do by talking about it.  You "do" it.  I always keep a certain amount of money in either a savings account or a CD which will renew in a year I expect to have larger bills to pay.  It can be anything from $5,000 on depending on what your needs are.  We  discussed this a while back but maybe you missed the posts.  Your Emergency Fund should not be in your long term best paying CDs because it should be considered "liquid" funds and not CDs you would have to cash out early to get needed extra cash.
theshield44
theshield44   |     |   5 posts since 2015
I absolutely agree.  I have an emergency fund at Barclays, which I've been happy with.  At the moment, I would recommend against a CD for the reasons paoli2 gave.  But here's an easy way to start an emergency fund.  Once you decide on the online bank, transfer money each week, $10, $50, $120, whatever you think you can manage.  If you do this each week like I do, and don't touch the money for a few years, even at these low rates I promise you if you need some money quickly, it will be there!  Good luck.
klink
klink   |     |   151 posts since 2012
The talk here got me to establish my emergency fund. Living on fixed retirement benefits and social security gives me solid numbers that allow me to dedicate a portion of each to the fund. At present I put away about a $150 per month and have been doing so for 2 years.
topkapi56
topkapi56   |     |   38 posts since 2011
Klink that is smart.  And if you never need to tap it for an emergency you have a nice bit of savings!
FAR
FAR   |     |   112 posts since 2013
MSM do a forum search to find previous posts relating to emergency funds.  Generally have enough liquid cash available to meet your living needs for 6 months. Intending to start one does you no good. You need to begin and be disciplined to set aside funds to meet your needs. I have a money market account with sufficient funds. Then I ladder my cd's so I always have new money available. If I do not need the money upon maturity it goes back into a cd.
Ally6770
Ally6770   |     |   1,861 posts since 2010
I also have laddered CD's but also have 4 Reward checking accounts. Have never had to use the emergency fund in the 52 years I have been married. Have been very lucky. JUST DO IT. You must live on less than you make. Your rent or house payment must not be more that one weeks take home pay. Do what you have to do to be able to do this, get a roommate etc. 
Stephen D. Abney
Stephen D. Abney   |     |   3 posts since 2014
I Bonds make a good emergency fund after the first year. You lose the last three months of interest if sold within five years, but always get your principal. They're guaranteed to meet the inflation rate, something you don't get with CDs.
Shorebreak
Shorebreak   |     |   4,000 posts since 2010
An emergency fund should be easy to access in the event of unemployment, illness or a major unplanned expense. I don't believe I Bonds meet that criteria. I bonds are intended to be long term investments and have several limitations to encourage saving for longer periods of time. Series I bonds must be held for at least 1 year and can not be redeemed earlier. After they have passed 12 months, you can redeem an I bond to collect your original investment as well as any interest that has accumulated. If you decide to redeem a bond within 5 years of issuance, there is a penalty of the past 3 months of interest. After 5 years, a bond can be redeemed without penalty.
Stephen D. Abney
Stephen D. Abney   |     |   3 posts since 2014
At first, I Bonds were part of my fixed income. They're good defense against unexpected inflation.  After you hold them a while, they become a good emergency fund asset. 
topkapi56
topkapi56   |     |   38 posts since 2011
Must, I suspect it is the same reason people put off going to the doctor.  Whatever bad things is going to happen is going to happen to someone else.

One of the unforeseen consequences of not having an emergency fund is that people are sometimes forced to borrow money from relatives.  And borrowing money from relatives is a recipe for disaster. 
paoli2
paoli2   |     |   2,148 posts since 2011
"And borrowing money from relatives is a recipe for disaster. "

It doesn't have to be.  Depends upon the relatives.  I have loaned money to several relatives without interest due and was repaid very quickly.  Isn't that what relatives do?  Help each other??
tomlawler
tomlawler   |     |   22 posts since 2010
I keep 6 months of living expenses in my money market account.
mustsavemore
mustsavemore   |     |   63 posts since 2013
Wow, people still respond to this thread despite being started over a year ago.  Since that time for me nothing has changed- still no emergency fund.  But my debt has increased.
Shorebreak
Shorebreak   |     |   4,000 posts since 2010
You would have perhaps been a candidate for the 'poor house', back in the day...
http://www.poorhousestory.com/history.htm
paoli2
paoli2   |     |   2,148 posts since 2011
Your "poorhouse" post brings back fond memories of my mom.  Whenever I would ask for a "nickle" to waste on a candy bar it was always "Child, you are going to drive me to the "poorhouse" the way you waste money".  I used to wonder why she always said that because although we were very poor, we certainly didn't own a car for me to drive even if I could as young as I was.   There was welfare for the poor in those days but my mom seemed to fear this "poorhouse".  It did have a positive affect on me when I became an adult tho.  Fearing the "poorhouse" was the main reason I learned to save even my pennies at a young age.
mustsavemore
mustsavemore   |     |   63 posts since 2013
I think you're on to something.  If a democrat gets elected as expected, then maybe others and the government can help support me.
Ally6770
Ally6770   |     |   1,861 posts since 2010
I think your problem is not making enough money and the solution would be get a second job or the alternative would be to learn how to control spending and don't spend what you don't have. It is called self discipline. Your choice. 
mustsavemore
mustsavemore   |     |   63 posts since 2013
Problem with your argument ally is that if you look at statistics, the majority of Americans are in the same boat as I am.  We can't all have the same problem/solution.  I think it is institutional
Ally6770
Ally6770   |     |   1,861 posts since 2010
I worked 2 jobs for 23 years. I had a 100% disabled husband.  This  helped to put 2 boys through college. I was a township treasurer for 23 and I also worked for a bank for 30 years. Try it your problems might be solved. 
paoli2
paoli2   |     |   2,148 posts since 2011
Oh creeps!  If a Democrat gets elected we will be stuck with a Socialist or Hillary who to me is worse than a Socialist!  Why are you always looking for others to support you?  Unless you have a serious medical condition, why would you want others to support you.  I have to agree with Ally on this call.  I think you have a self-discipline problem if you don't have a medical one.  Life is about choices and if you choose the Dems just so they can take care of you, you are making the wrong choice.
mustsavemore
mustsavemore   |     |   63 posts since 2013
Paoli, why then do you think a democrat has won the last two elections and are predicted to win again?  I think for the same situation I am in which is shared by the majority of Americans.  The economy hasn't improved enough to help us
paoli2
paoli2   |     |   2,148 posts since 2011
Mustsave:  This is very obvious.  It also is the reason Obama has done nothing to keep the illegals out.  More future democrats to keep this government controlled system going.  Is this really what you want to see our country end up being?  We need to get leaders in power who will help people like yourself get jobs where they can support themselves and not have to be in debt to the taxpayers to survive. 

I truly don't think you want to be controlled by the government but somehow you have fallen deep into that black hole and can't figure out how to climb out like millions of others.  Sometimes even "self-discipline" isn't enough once you are so deep in the hole you can't figure out how to get out. I know someone  who wants so badly for Bernie Sanders to be elected because they feel it is their only way to survive financially.  I cannot vote for Hillary or Bernie Sanders.  One, I think, truly believes in his way and thinks he is helping others, the other is so corrupt she isn't fit, imo, to be in control of the dog pound much less our country.  Best of luck to you in finding a way out of your hole.
Shorebreak
Shorebreak   |     |   4,000 posts since 2010
I think mustsavemore is stirring the pot here. It was enough to get paoli2 to go on a political blitz again.
paoli2
paoli2   |     |   2,148 posts since 2011
Hey!  I just woke up.  I gave you hours of peace from me.  You don't know what a "political blitz" is from me.  Ask Donald Trump.  I am not allowed to even post on his page!  You want to ban me from DA too??  I think "you" need a nap SB.   Have a good evening.
Shorebreak
Shorebreak   |     |   4,000 posts since 2010
Why am I not surprised?
Ricochet
Ricochet   |     |   206 posts since 2010
Why is it always the governments fault? It's the business people that dont provide a wage to get ahead on. Seems the government has given so much free money to business that the cash in their pocket is so heavy the cant get off their *** and make working worth while.