Comments on: Emergency Funds: How and Why You Should Get Started Right Now

By: Outdoorseaguy

Outdoorseaguy — Thu, 22 Oct 2009 19:58:18 +0000

The emergency fund. The best financial advice I’ve ever read (that and spend less than you earn). I’m in the middle of a financial emergency right now and I’m not sweating it because of the emergency fund. I’ll likely use 3/4 of it to pay this veterinary bill but that’s what it’s here for. It means I don’t have to use my credit card or ask my parents for money.

By: Jorge

Jorge — Sat, 14 Mar 2009 11:49:03 +0000

Dan makes an interesting point about the line of credit above. The only issue these days is that banks are freezing lines of credit. So, if you get laid off and need to access it, it may not be available!

The Wall Street Journal recently recommended some potentially controversial advice, to borrow on your credit card or HELOC and put it in the bank. That way you know it will be there if you need it. Check out my thoughts on this here:

http://independentminded.org/2009/03/13/how-to-build-your-emergency-fund-fast/

Enjoy!

By: Dan

Dan — Wed, 14 May 2008 01:45:09 +0000

I think Trent is costing himself a good deal of money having an emergency fund. I’ll explain how.

He has a 3% taxable return on his emergency fund right now (based on the ING ad to my right). However, his student loan has an 8% rate. He would be better off putting the $20 a day into that loan and setting up a $20,000 line of credit, which he could use in case of emergency. The line of credit won’t cost anything unless he uses it and he’d have the benefit of an 8% tax-free return instead of a 3% taxable one.

By: Matt

Matt — Tue, 15 Apr 2008 20:56:10 +0000

ING is a pretty good high yield savings account, and very user friendly. However etrade.com also has a high yield savings account and their rate generally beats ING’s. Their site is not quite as easy to use but by no means difficult.

By: Toaduni44

Toaduni44 — Thu, 10 Apr 2008 19:02:46 +0000

If you want to open an ING Savings account, send an email to toddboruff AT yahoo DOT com and I’ll send you a referral link. You get $25 when you deposit $250 or more, and I get $10. What a deal!

By: theobromacrunch

theobromacrunch — Fri, 22 Feb 2008 07:02:04 +0000

thank you very much for this article. i started ING last 2005 with $25.00 every 2 weeks and whenever i had extra money whether tax refund or a referral bonus i add those to my emergency fund. so far i’m geeting good interests and it became helpful when i had a crisis recently. i’m planning to have a car fund so whatever amount i saved on that will go to car maintenance and hopefully a downpayment to a new car in case i need to get a new one.

By: Tyler Norwood

Tyler Norwood — Mon, 31 Dec 2007 22:40:03 +0000

This is an excellent blog, Trent. I have read just about every article you have written in the past two weeks and loved every one of them.

I have even started my own blog – albeit nothing to do with personal finance – and I think I owe the inspiration for it to you.

Thanks then and keep up the good work.

By: Aussie

Aussie — Thu, 10 May 2007 18:43:50 +0000

My emergency fund saved us when I decided to take a small break from working. We had enough to live on for 5 months. Now I am back at work full time, my husband also started work (he recently finished graduate school) and our emergency fund is being built up again.

I love the ING savings account – better rates and very user friendly! Highly recommended.

I am new to this blog and am loving it already!

By: networthington

networthington — Fri, 05 Jan 2007 17:47:34 +0000

Ditto, conorm. I use the same online bank and have saved over 5 k so far. I just got a new job making twice as much as I was before, with bennies, etc., and since I am used to living on next to nothing and have no major purchases to pay off outside of school loans, I just push everything I can into savings. I know what it’s like to have to write a check to the mechanic when it’s the last $300 you have to your name, and believe me, making sure I don’t have to worry like that is worth the sacrifice of a starbucks coffee today.

By: conorm

conorm — Wed, 03 Jan 2007 18:49:03 +0000

I would like to echo Trent’s point that cutbacks on frivolous daily expenditures can really add-up

Last February I started an emergency fund with $25 dollars a week deposited into an ING Account. At the time I thought this was all I could afford (my salary hasn’t gone up since then), but I quickly got into the habit of depositing any spare cash whenever I could.I now have over $4k saved, and hoping to hit $8k by year end.

I think its also worth nothing that the convenience of online savings accounts make this much less painful to achieve. I’d rather go to a leper colony than go down to the local bank and stand in line….

By: kozel

kozel — Wed, 03 Jan 2007 18:15:24 +0000

I live in a country w/ universal health care, unemployment insurance and am car-free but you gotta have an emergency fund. I don’t want to count on the state to take care of me financially. Even if you do lose your job and get unemployment benefits, they benefits will generally not be equivalent to your salary, having some extra money on hand is always needed.

By: Trent

Trent — Wed, 03 Jan 2007 17:42:30 +0000

I would carry at least some small emergency fund. There are lots of things that can go wrong that could destroy your budget: your rental property is damaged, you have an unexpected child, or so forth.

By: Canadian

Canadian — Wed, 03 Jan 2007 17:39:05 +0000

Oh, and also d) don’t own a house yet (so no unexpected furnace problems or whatever).

By: Canadian

Canadian — Wed, 03 Jan 2007 17:36:20 +0000

Do you think you still need an emergency fund if you a) are car-free (so no unexpected car repairs), and b) live in a country with free universal health care (so no unexpected medical expenses), and c) would qualify for unemployment insurance if you were to lose your job? I do have money in savings that I could dip into if some emergency arose, but right now I can’t even think of an emergency that could happen (because of a,b,c above).