Why I Save Money In An Emergency Fund

One of the most important things about having your emergency fund is to decide why you need one. Everyone needs to have some sort of cushion to fall back on when times get rough but you still personalize it even more.

I decided to get my emergency fund after watching an episode of Girlfriends. In this episode,, Joan had lost her job and was talking to Toni about needing money. Toni revealed that she had half a million dollars (or was it one million even?) in her Never Go Back To Fresno fund. Toni worked as a real estate agent and she realized that while her income was great it was not very steady. She decided to save diligently and build up a fund that she could rely on if she was in a down period. This money would ensure that she never had to go back to Fresno, which is where she was born into a poor, dysfunctional family.

I liked the idea so much that I decided to start my own Never Go Back to Fresno fund and I even decided to call mine by the same name, even though I had no idea where Fresno was.

I built up my little emergency fund slowly because at the time I was paying down other large amounts of debt. I had built up the fund to a little over a thousand dollars when I decided to cash it in and completely pay off one debt that had been lingering for quite some time.

I like the idea of having ready access to cash that I can get my hands on that is still earning some kind of interest.

I like the idea of just having a cash base that I can draw from because there are a few situations that I might be in that call for cash.

I like seeing the little graph in Money that shows my little emergency fund is growing.

I like being able to say I have an emergency fund.

Why do you save money in your emergency fund?

Author: Lulu

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  1. I save money in an emergency fund in the event that I lose my job. My wife stays at home to be with the kids, so we rely on my income only. We keep 2 months worth of expenses in a liquid account so we have quick access to it in the event of an emergency. We also have another 8 – 10 months worth of emergency funds in 5 separate 90 day CDs that expire at different times throughout the year. We continue to rollover the CDs when they expire into new 90 day CDs. That way if we need the money, we can use it. Last year, we earned an extra $2,000 with these CDs which we rolled back into them. Unfortunately, with the drop in interest rates, we won’t earn as much this year.

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  2. I like every idea about your emergency fund… except, you didn’t stick to its basis and use it only for emergencies because you cashed it in and paid off a bill. Kinda defeats the purpose?

    My emergency fund isn’t really for anything particular – just in the event that something unplanned happens and I need to dip into it.

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  3. @ Shawn:
    Oh Shawn…the reasoning behind raiding the EF that time to pay off that bill was to remove a mental burden as well as the financial one.

    The bill that was paid off had some very bad stuff attached to it and raiding the EF fund freed me mentally from that bad situation.

    So go ahead and spank me for not having a real emergency to deal with then…but I needed to do it at that time.

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  4. Ah fair enough heh, your money not mine 🙂 If it worked for you, thats good 🙂

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  5. I keep mine for varying reasons. I never actually had one until a few years ago when I read Dave Ramsey’s book. It sure came in handy when I was inbetween jobs and did not recieve a paycheck for a month. During that time my car broke down twice, and my son had a minor medical emergency in Mexico where my insurance did not cover him.


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  6. You need to have a stash put away for an emergency. My mother always stressed to me that a woman needs to have an account with money in it that your husband knows nothing about in case of some crisis or emergency.

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