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emergency funds are no fun

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swingingAn emergency fund is the least fun, most boringly sensible thing you can do with your money. Saving up for things is great, because you get things that you want in return. Investing for retirement is great, because you get to be rich in return. Even paying off debt is great, because eventually you’ll be out of debt (which is supposed to be a great feeling) and it probably means that you overspent at some point, so you’ve enjoyed all that stuff even if you did pay too much for it.

When you put money into an emergency fund, it needs to be an accessible place, so it doesn’t even compound that much. You squirrel away a whole load of money, at least the equivalent of several months expenses and plan never to spend it. Where’s the fun in that? There isn’t any fun in it, that’s where.

Thing is, if you need an emergency fund, it’s because you are a grown up. Sure, being a grown up means having fun, but it also means accepting that sometimes you need to be sensible, and then it means getting on and doing it. No fun, no messing and no spoonful of sugar.

On the bright side, once the emergency fund is in place, you don’t have to think about it too much, it’ll help you sleep at night, and you can get on with playing on your Wii, or whatever else it is that grown ups do.

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25 comments for “emergency funds are no fun”

  1. It may not be “fun” but it is a LIFESAVER when there is a problem or family tragedy. My is about to get hit so I can go to my cousin’s funeral.

    Posted by Debt Free Revolution | April 14, 2008, 8:45 pm
  2. I’m sorry to hear about your cousin.

    You’re right, they are absolutely and utterly necessary. Everyone who needs one, should have one.

    Posted by plonkee | April 14, 2008, 10:18 pm
  3. It has been said that there is no softer pillow at night than having money in the bank. For me, that pretty well sums up the emergency fund.

    Posted by Frugal Dad | April 14, 2008, 11:47 pm
  4. I agree, I wrote about doing so recently: Create Your Cash Reserve

    Posted by Curious Cat Investment Blog | April 15, 2008, 2:35 am
  5. You mean I have to be a grown-up now? That’s no fun. Oh well…

    Posted by Mrs. Micah | April 15, 2008, 2:47 am
  6. A credit card is a good emergency fund. If you are paying down your debt each month, I don’t see the need for an emergency fund. It’s the total picture. If you are moving ahead every month, moving backwards one month is no big deal.

    Posted by Denver Mortgage | April 15, 2008, 2:51 am
  7. Oh, I hear that! Being new to the whole “getting out of debt” thing, I see so many other PF bloggers doing all sorts of exciting things like paying off the remainder of one of their cards or investing in something that they can watch grow (or not).

    If you invest money in the stock market, you have the excitement of watching the ups and downs every day, online or in the newspapers.

    I am really looking forward to getting my emergency fund sorted so I can join all you other exciting PF’ers :)

    At least I’ll be able to sleep better at night :)

    Posted by Dave | April 15, 2008, 2:55 am
  8. Extremely important for lifes curve balls.
    @ the credit card as an emergency fund, that is not that great an idea. That money you’d be using would be borrowed money. You don’t want to have to borrow money when you are short on it. The emergency fund has to be separate from any other account to make sure you don’t count on it for those extra trips to the mall or such.

    Posted by Save Money | April 15, 2008, 3:35 am
  9. I have an emergency fund, but I’m not looking forward to the whole adulthood thing. Are you sure the urgent need to build one of those swings like in your picture doesn’t qualify as an emergency?

    Posted by E.C. | April 15, 2008, 3:47 am
  10. I agree with you.

    Posted by Kelli Myers | April 15, 2008, 7:26 am
  11. I don’t think building one of those swings qualifies as an emergency, but only because I’m jealous that I don’t have the room to do so.

    @Mrs Micah:
    You’re only a grown up in the small things like money matters or getting married, all the best people are otherwise not grown up at all.

    Posted by plonkee | April 15, 2008, 8:23 am
  12. I totally disagree with using credit as emergency fund. The whole idea of credit is flawed, as if you are spending someone else’s money, you have to keep worrying about paying it back. It makes more sense to put your own money away.

    I keep a few thousand in an e-savings account and I recently used it to pay back my parents contribution to my tuition fees. Now I am building on it again for a summer trip. So it isn’t so much an emergency fund as fund for big future purchases, guilt free! :)

    Posted by Kerstin Doe | April 15, 2008, 8:33 am
  13. I use my cash isa allowance to build my emergency fund. Is this a good idea or a bad idea? How do you hold your emergency fund?

    Posted by Llama for brains | April 15, 2008, 9:28 am
  14. I believe cash ISAs are better for long-term savings (such as pension fund) as they are best used as a year-on-year savings investment. If you remove your money you always lose out, so I would take Plonkee’s advice and use an account with easy access (such as an e-savings account) but taxable interest. This way you can go into it when you need to and not worry too much about losing interest.

    Posted by Kerstin Doe | April 15, 2008, 10:10 am
  15. At the moment, mine is in a cash ISA, but only because I can’t afford to save more than the cash ISA amount for all my savings combined. In an ideal world I’d probably have it in a separate account, and I’d need to review whether it was better for that to be taxable or not.

    Posted by plonkee | April 15, 2008, 12:59 pm
  16. What a great post, I plan to talk about my goals re emergency fund later today or tomorrow. Having had 2 very serious emergencies come up and have had to use all my other savings, I really wish I’d understood this earlier!
    p.s. I love the picture - oh to be a kid again, or find play equippment big enough for adults :0)

    Posted by Frugal Trenches | April 15, 2008, 1:06 pm
  17. I’ve always had a “warranty” fund, to kind of replace the concept of extended warranties. So I find out how much the extended warranty would be and put that into an account, but it isn’t my emergency fund. So I guess I need a new one for the emergency fund as well as making use of my cash ISA…

    Maybe I need a new job that actually pays enough to do that… but then I would need a higher emergency fund?

    Posted by Llama for brains | April 16, 2008, 3:54 pm
  18. bingo is the best for every internet user to enhance their skills.

    Posted by john | November 26, 2008, 8:26 am
  19. Great advice,It is also really important to save when you are young!

    Posted by debt solution | October 22, 2010, 9:25 pm

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