Comments on: 5 People Who Need an Emergency Fund

By: Kalie @ Pretend to Be Poor

Kalie @ Pretend to Be Poor — Tue, 17 Nov 2015 20:08:35 +0000

Yes, I absolutely agree that an emergency fund is the key to staying out of consumer debt–forever. If you own a car, it will break and eventually need to be completely replaced. Everyone gets sick sometimes & incurs medical A. These types of “emergencies” aren’t really surprising at all so why wouldn’t we save for them?

By: Kayla Sloan

Kayla Sloan — Mon, 16 Nov 2015 23:40:22 +0000

In reply to EL @ MoneyWatch101. Exactly!

By: EL @ MoneyWatch101

EL @ MoneyWatch101 — Mon, 16 Nov 2015 21:25:56 +0000

Yes all good points you make here, EF is a must in the personal finance arsenal. I lean more on the 4 month as well, but 1 month is better than none. So I suggest you get saving asap, before that emergency hits.

By: Kayla Sloan

Kayla Sloan — Mon, 16 Nov 2015 15:41:59 +0000

In reply to Holly Johnson. I do think everyone needs an emergency fund, but there are probably some (rare) people who don't fit any of the categories on this list. Even then, I still think they should have an emergency fund in place. Now that I have one I can't imagine not having one for any reason.

By: Deb

Deb — Mon, 16 Nov 2015 15:10:30 +0000

In reply to Peach. Thank you so much! That makes a lot of sense to me. I appreciate it

By: Holly Johnson

Holly Johnson — Mon, 16 Nov 2015 13:34:36 +0000

So, basically everyone needs an emergency fund! I couldn’t sleep at night without mine. I like knowing I have the cash to handle anything that pops up. Having rental properties means we need to have a bigger cash e-fund than most people. You never know when you’ll have to replace something randomly – like when we were on vacation this summer and I had to replace an AC and furnace for $4,700 and pay over the phone. That hurt.

By: Peach

Peach — Mon, 16 Nov 2015 04:05:09 +0000

In reply to Deb.

Hi Deb!

I am going to advise you to NOT put your emergency fund into any sort of investment. Here is the reason: Your emergency fund needs to be as liquid as possible. I always tell people that you need to have access to all of it in 30 minutes or less. If you needed access to your money during an emergency, you would have to sell off your shares from your Index fund and wait for the money to get to your account. Secondly, think of your emergency fund like you would an insurance policy. Insurance costs you money to protect you and your assets. By keeping your emergency fund extremely liquid (30 mins or less) it is technically costing you money because you could be sticking that money in something that would return you a much better return than a pitiful interest rate on a savings accounts. The point of an emergency fund is you need it NOW. Great question! 🙂

By: Deb

Deb — Sun, 15 Nov 2015 21:45:00 +0000

I’ve been following you on twitter and have started to read your articles on here recently. I have a question for you. So, I have the car paid off, an emergency fund for it and an additional emergency fund for my house. I have these in savings accounts that have jack for interest. My friend suggested I put most of my savings into something like a Vanguard index fund so that it makes more money than my savings but could still have access to it within a couple of days in an emergency. Could I get your take on this if you have a moment? I’m a bit gun shy as a single person taking that chunk of money and putting it into a fund.

By: Kayla Sloan

Kayla Sloan — Fri, 13 Nov 2015 17:13:12 +0000

In reply to Peter @ How To Live In The U.S.. Yes, I agree that you should have an emergency fund and add to it each month, at least until it reaches the point that it's full at 6 months' worth of expenses.

By: Kayla Sloan

Kayla Sloan — Fri, 13 Nov 2015 17:11:51 +0000

Definitely! I sleep way better at night knowing that I have some money in my savings account in case of an emergency.