Comments on: Establishing an Emergency Fund http://www.mint.com/blog/saving/establishing-an-emergency-fund/ The blog of the free, simple personal finance solution. Track all your spending automatically, find the best deals, save more money. And save the world. Sun, 12 Feb 2012 05:07:51 +0000 hourly 1 http://wordpress.org/?v=3.1.3 By: Brian Bigelow http://www.mint.com/blog/saving/establishing-an-emergency-fund/comment-page-1/#comment-41948 Brian Bigelow Wed, 11 Nov 2009 03:11:44 +0000 http://www.mint.com/blog/?p=2533#comment-41948 It's very important to have a rainy day fund set up. Luckily, I had one set up the last time I lost my job. It turned out that I couldn't collect unemployment because of the fact my unemployment account was set up wrong. Thankfully, I had the rainy day fund set up so we made it through a time that could have been much rougher. If you can't seem to save anything like I couldn't at one time there is a way to get started. Use whole dollars to pay for everything with the change collecting in a jar. After several weeks, or months, use the jar money to open a bank account. That's how I got started being able to save. It’s very important to have a rainy day fund set up. Luckily, I had one set up the last time I lost my job. It turned out that I couldn’t collect unemployment because of the fact my unemployment account was set up wrong. Thankfully, I had the rainy day fund set up so we made it through a time that could have been much rougher.

If you can’t seem to save anything like I couldn’t at one time there is a way to get started. Use whole dollars to pay for everything with the change collecting in a jar. After several weeks, or months, use the jar money to open a bank account. That’s how I got started being able to save.

]]> By: Edward http://www.mint.com/blog/saving/establishing-an-emergency-fund/comment-page-1/#comment-33750 Edward Thu, 30 Jul 2009 12:17:27 +0000 http://www.mint.com/blog/?p=2533#comment-33750 I enjoyed your article and agree that an emergency fund of cash (your credit card shouldn't be your emergency fund, only as last resort) is necessary in any economy. However, I differ with you on two points: 1. When considering an emergency fund "trips to Tahoe and expensive hobbies" are not emergencies. If I lost my job today the last thing I'd be thinking about is taking a trip or funding my expensive hobby. For those items, I'd recommend separate accounts. 2. Placing your emergency fund into a CD would not be wise because it is usually tied up from 6 months to 1 year or more. You can't plan emergencies, so if you have your money tied up in a CD and take it out; you will be hit with an early withdrawal penalty. Remember: "The wise man saves for the future but the foolish man spends whatever he gets" (Proverbs 21:20) I enjoyed your article and agree that an emergency fund of cash (your credit card shouldn’t be your emergency fund, only as last resort) is necessary in any economy. However, I differ with you on two points:
1. When considering an emergency fund “trips to Tahoe and expensive hobbies” are not emergencies. If I lost my job today the last thing I’d be thinking about is taking a trip or funding my expensive hobby. For those items, I’d recommend separate accounts.
2. Placing your emergency fund into a CD would not be wise because it is usually tied up from 6 months to 1 year or more. You can’t plan emergencies, so if you have your money tied up in a CD and take it out; you will be hit with an early withdrawal penalty.

Remember: “The wise man saves for the future but the foolish man spends whatever he gets” (Proverbs 21:20)

]]> By: Mack jackson http://www.mint.com/blog/saving/establishing-an-emergency-fund/comment-page-1/#comment-32740 Mack jackson Wed, 08 Jul 2009 05:36:45 +0000 http://www.mint.com/blog/?p=2533#comment-32740 Thanks for sharing such great post, according to me there are numerous reasons when we need such emergency funds. By building an emergency fund you will feel more secure because you are prepared for the facing any financial crisis. For more details on emergency fund refer http://www.prime-targeting.com/guidelines-for-building-an-emergency-fund/ Thanks for sharing such great post, according to me there are numerous reasons when we need such emergency funds. By building an emergency fund you will feel more secure because you are prepared for the facing any financial crisis. For more details on emergency fund refer http://www.prime-targeting.com/guidelines-for-building-an-emergency-fund/ ]]> By: Jay (market folly) http://www.mint.com/blog/saving/establishing-an-emergency-fund/comment-page-1/#comment-31022 Jay (market folly) Tue, 05 May 2009 21:51:33 +0000 http://www.mint.com/blog/?p=2533#comment-31022 Great points brought up here. This is more important now than ever in a time when many Americans are relying on credit cards as their emergency fund and a means for liquidity. As we've seen recently, lenders are cutting credit card lines drastically (available credit) and even closing down accounts entirely. This leads to an essential 'downgrade' in consumer credit scores (lower FICOs) due to higher utilization ratios and less credit score history available. We touched on all this in more detail here: http://www.marketfolly.com/2009/03/downgrading-american-consumers-credit.html All in all, emergency funds are absolutely essential now, especially for those who have often over-relied on credit cards as a safety net. What happens if emergency credit card is closed or your buying power drastically reduced? A nice cash cushion is essential in an environment where cash is king. Many companies out there suffering right now are doing so because of lack of credit... they never built up their balance sheets with cash. Now that their credit has dried up, they can't pay for anything, their liquidity is gone. While there are obviously differences between a consumer and a business, the core of the matter is the balance sheet and cash. Great post illustrating the essentials on how to do so effectively! Jay Great points brought up here. This is more important now than ever in a time when many Americans are relying on credit cards as their emergency fund and a means for liquidity. As we’ve seen recently, lenders are cutting credit card lines drastically (available credit) and even closing down accounts entirely. This leads to an essential ‘downgrade’ in consumer credit scores (lower FICOs) due to higher utilization ratios and less credit score history available. We touched on all this in more detail here: http://www.marketfolly.com/2009/03/downgrading-american-consumers-credit.html

All in all, emergency funds are absolutely essential now, especially for those who have often over-relied on credit cards as a safety net. What happens if emergency credit card is closed or your buying power drastically reduced? A nice cash cushion is essential in an environment where cash is king.

Many companies out there suffering right now are doing so because of lack of credit… they never built up their balance sheets with cash. Now that their credit has dried up, they can’t pay for anything, their liquidity is gone. While there are obviously differences between a consumer and a business, the core of the matter is the balance sheet and cash.

Great post illustrating the essentials on how to do so effectively!

Jay

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