Two Emergency Funds
I think I need two emergency funds.
While looking for some links to bookmark for a task I have for SVB, I came across this post on how we need emergency funds.
What struck me in this article are two things:
- An emergency fund is something you should never touch apart from the event of a dire, dire, dire situation, like losing a job or something in your life going kaput. A car, a house, a pet..
- That you really should put that emergency fund in a SAVINGS ACCOUNT; something liquid, never something semi-frozen, as in a Time Deposit account (CDs to the people who live in the States and elsewhere that this term is used), a Stocks account, a Bonds account, or even a Mutual Fund.
My dad had given me advice on #2 around 3 Saturdays ago, and while I chewed on the thought, the low interest rates in the “regular” savings accounts turned me off from the thought. Now I realize that it’s true: the emergency fund does have to be something that you would not ever be able to touch, but liquid, if worse comes to worst.
Hmm. I think I shall have to shop for the savings accounts with the best interest rates, and make sure that I update it with some activity ever so often, to avoid penalties.
Oh the mess of being an adult!
And this brings me to the point of why I need TWO emergency funds:
- One fund is for the long, long, long term. Meaning, NO TOUCHIE!
- The other fund is for the short term craziness that I have. I am still such a spender at heart that I have weekly “emergencies.” Until I grow out of that, I need a RIGHT-NOW emergency fund!
Gah. I think Shoppingera really has to give way to Frugalista and soon, eh?
But I am making progress, somewhat. Hee.
