Do you have an Emergency Fund?

Blast from the Past: This post was originally published here – http://modernsurvivalonline.com/do-you-have-an-emergency-fund/

I am not the most financially sound person in the world. One thing I do know – is just when things seem to be going well something unexpected always seems to happen where money is suddenly needed.

I make decent money and typically have “disposable” income to pick up a little of “this” or a little of “that“. Typically go out to eat once a week, and pick up some preparedness supplies. Kids needs clothes, car taxes need to be paid, prescriptions need to be picked up, etc.

This may be a preparedness blog – but as the title says – “Thoughts on survival and the world today“. Well, many people today live from paycheck to paycheck. Many people also constantly complain about being broke but the reality is they just spend money on frivolousness things. With the economy today and the future uncertain – we all need to take finances more seriously. If you already are – congrats as you are one for the few who do.

Experts generally recommend starting an Emergency Fund for those “just in case” moments. An Emergency Fund consists of a sum of money sitting in a bank account or other secure location which is to be accessed when some type of emergency comes up. Now – here is where I have to put a preparedness-spin on this topic. Depending upon the emergency which requires your extra money – having it sitting in a bank might not be the best location for it. If there is some type of power outage where “cash is king” – a debit card or check may not be acceptable forms of payment from many vendors. Options? How about a fire resistant lock box at home – possibly bolted to the floor? Being able to get to cash at anytime may be important depending on what transpires.

My point with this post is if you do not have an Emergency Fund – start one. Set a goal – maybe $500. Stop renting movies, don’t go out to lunch so often, sell some stuff on eBay -whatever – just start saving. Once you reach your first goal – set another. Many financial experts suggest having 6 months worth of expenses put back. That sounds impossible I know – but start small.

Take care all –

Rourke

 

 


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9 Comments

  1. First off, let me say I am retired. I always had a hard time putting money aside for emergencies. Putting money aside in my 401K was never a problem, since it came out of my paycheck before I saw it. But, like most people, taking money out of your weekly expenses was hard. Then I started using my tax returns to build up my emergency fund. This is money that does not come out of the budget and so it is not missed. When I get a tax refund each year, it goes straight into the E fund. I currently have a little over $4000 set aside for real emergencies and it really feels good to know it is there. If people starting setting aside any extra funds they get, like their tax returns, or bonuses from work, they really don’t miss it.

  2. When I was much younger one of my coworkers had developed a plan he called “tithe myself”. Basically, he took 10% of his gross pay and put it into CD’s or bond funds or other investments which weren’t very liquid. That way he couldn’t simply walk into a bank and withdraw money from a savings account. He learned from day one to live off whatever was left from his pay check after taxes and insurance and his self tithing were deducted. Anytime he got a raise or a bonus, he took 10% and added to his savings.

    I’d like to say I’ve followed his example, but sorry to say I haven’t. He put his 3 kids through college without adding any debt and has retired to a very nice hacienda in Costa Rica.

    JAS – just a thought, if you’re receiving a tax refund you have given the government a free loan. It would be more frugal to adjust your deductions to ensure you have to pay a little come tax time and place the amount that would have been in your refund check into a savings plan. For example, if you average a $1,000 refund every year and instead put it into a 2.5% muni fund for 10 years you’ll have almost $1,500 of interest in your pocket instead of giving the gov’t that free loan.

  3. It takes $1.40 in pre1965 silver to make one oz. After the collapse, how are we going to make sure we are getting the most for what we have? I have quite a bit of silver put away. I buy some with each paycheck from my pension. I guess will have to wait till a rate of exchange is thought up nationally. And ideas would be appreciated.

  4. It adds up faster than you think . A friend of mine started by him and his wife just saving the change and putting it in a jar . Every 3-4 months she would take it to the credit union and change it to cash . He told me that over a year they had saved $1118. They put it in a fire safe box and kept it at home just in case . Also they kept doing this and now are in the 2nd year . I keep change too but don’t change it out just pour it in 5 gal bucket in my garage . I also started keeping all my one dollar bills .
    I hope that helps ,
    Robert W

  5. Yes. This was one of the great ideas that we (my friend and I) came up with as we run ideas off each other for preparing scenarios. We both thought the same thing. What if you had to leave in a hurry? Do you have enough funds to sustain you for a few days? The answer at the time was no … now it’s yes.

  6. It seems to me that in these times with the Federal Reserve printing the value of our dollars away, the only real way to preserve your purchasing power is to buy precious metals. I have purchased a bit of “junk” silver which is pre-1965 coinage containing 90% pure silver. Just hope for the best and plan for the worst.

  7. My E-fund is pretty much all the money I have other than the minimum to operate the monthly bills.Savings accounts don’t pay spit and everything else is just high risk right now. I do have a considerable amount of silver (90% coins) and a small amount of gold, but that is for the recovery after some type of community has re-asserted itself. I am ripping thru my retirement fund (after taking a healthy tax hit) as fast as I can checking off my need list and durable and barterable goods list ( I would rather have another Gen 3 NVD, or 5K of .223 than have it sit in the bank and make someone else profitt. Also the “I need two” list. I will be paying off all mortgages this week and getting debt free. I am working hard to be off grid and require little or no cash, It will pretty much clean me out, but as along as they last (I envision them being on Obamas chopping block) I have three govt. Checks to live on. (Retired Fed, DAV,SS) I may just get an animal sitter and visit my bullion in Switzerland ;)…..ha ha ha…..Regards D.

  8. I like to sell stuff on ebay – I keep the money in my papal account so I cant spend it on some spur of the moment item. I am not sure what I am going to do once it gets to a large enough amount – savings? CDs? Safe? Coins? There are so many “what ifs” about the future. I have horrible money skills and if it’s under my matress I will spend it so for right now it can sit there in computer land – homefully we wont EMP and my cash wont dissapear.

  9. have always tried to keep cash on hand- I am self-employed, so when I was making good money , I put it back. . . the last 3-4 lean years have eaten most of it, but thank GOD I saved it instead of buying a lot of “toys”. . . we still have an E-fund, but I too wonder about putting extra cash into tangible assets- food , tools, more guns, fuel, etc, rather than sitting on the cash- after the fiasco in Cyprus, I would leave as little as possible in the bank- keep it at home in a safe. . . .

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