plonkee money an english-er's thoughts on personal finance

April 14, 2008

emergency funds are no fun

Filed under: savings — Tags: , — plonkee @ 8:28 pm

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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