Comments on: Create a Personal Budget: Creating an Emergency Fund

By: Wendy

Wendy — Sat, 11 Oct 2008 02:45:49 +0000

Our local Home State Bank pays over 4% on money in checking accounts, and our local Addison Avenue Credit Union pays 5.25% on money in checking accounts. Customers are simply required to meet a few minimum requirements per month!

What a great deal! Earn money on every dollar until the day you spend it for your regular day-to-day expenses!

By: Charles

Charles — Mon, 10 Mar 2008 04:51:13 +0000

Keep in mind that HELOCs and credit card balances can be changed, or cancelled at the convenience of the lender. Who’s to say that they may decide to cancel your account, or lower your balance, once they learn of your employment situation.

This when you need the credit the most!

By: OaklandTechie

OaklandTechie — Tue, 22 Jan 2008 06:49:37 +0000

Cold hard cash is always better because unlike HELOC credit lines or credit cards — it *EARNS* you interest!

By: Cap

Cap — Wed, 18 Apr 2007 22:57:14 +0000

More great points, thanks Curt! Credit cards and HELOCs can be tapped in case of extreme emergency, I suppose. But yeah you’re right, having cold hard cash will definitely be a plus. And hey you might be right, you only need the things when you don’t have it. maybe diligently stashing away for an emergency fund will ward off all the emergencies!

By: Curt Weil, CFP

Curt Weil, CFP — Wed, 18 Apr 2007 04:31:30 +0000

While I hate using credit for anything but buying real estate, having a credit card or two, with UNUSED credit limits is a great safety net in case of emergencies. Ditto an UNUSED home-equity line of credit.

In every case, we recommend at least two months of minimum living expenses be readily available in a money-market/savings account. The interest “cost” of having funds in a low-earning account are just the minimal “premium” or cost of peace-of-mind insurance – and, superstitiously, if you have an emergency fund, you probably won’t need it!

By: Cap

Cap — Tue, 17 Apr 2007 18:22:56 +0000

Ah good point Derek on differentiating between a savings account and an emergency account.

By: Derek Punsalan

Derek Punsalan — Tue, 17 Apr 2007 12:19:26 +0000

Great tips on setting up an emergency fund. This is something that everyone should consider allotting a certain percentage of their current paycheck for in order to anticipate any future hurdles. This doesn’t necessarily mean that your savings account should be considered an emergency fund. I recommend setting up both – a savings (long-term) and a emergency account (short-term).