Author Topic: "Emergency fund" irony  (Read 12964 times)

rocklebock

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"Emergency fund" irony
« on: July 11, 2014, 02:47:03 PM »
I always like the variations on "Do I need an emergency fund?" on this forum, and it's interesting to see how many completely different answers that come up, and the disparity of how much cash different people keep on hand. For many years I've kept somewhere between $5k-$10k in a savings account.  Some of it gets allocated to my Roth IRA, vacations, and larger planned purchases, but I always keep a minimum of $5k in there as an emergency fund, just in case something really bad happens (Or the Mercedes 300D Turbodiesel of my dreams pops up, and I need CASH NOW). Anyway, that's the number that I feel comfortable with. It's mostly an emotional decision.

Well, I've never, ever had a need for that emergency fund. Until late last month, when my debit card information was stolen, with over $1100 in charges made in a few hours (How does someone spend $830 at Rite Aid? I don't even want to know). My bank notified me quickly, but due to a whole shitstorm of Kafkaesque machinations on their part, plus the fact that I don't live anywhere near a physical branch, I had no access to my money for 9 days. No online banking. No ATM access. No money in checking until they processed a credit for the fraudulent purchases. Wow, good thing I have that emergency fund! Except - you guessed it - I also could not access my emergency fund during that time. Oops.

So my credit card and cash borrowed from my SO became the emergency fund for 9 days. Which happens to approximate the approach recommended by the "You don't need an emergency fund" camp on this board.

There's no moral here, except that if you are in the "I need an emergency fund" camp, you might want to set it up so you can access it outside of your normal banking routine.

Dyk

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Re: "Emergency fund" irony
« Reply #1 on: July 11, 2014, 02:57:28 PM »
Rocklebock:

Great timing, I was just thinking over my 'Emergency Fund' ..... thanks for the insight, I have always thought $ amount, and not accessibility/location.

Another Reader

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Re: "Emergency fund" irony
« Reply #2 on: July 11, 2014, 02:59:18 PM »
My e-fund is at a different bricks and mortar bank than my main bank, close to the house, with branches on just about every corner in a lot of states.  I also keep cash in on-line accounts that takes a few days to access.

Credit cards, HELOC's, etc. are great until they are cut off in a panic or a bank failure.  Again, it makes sense to have some credit through a different lender because of the potential for a clusterf*** such as the one you experienced.

Cheddar Stacker

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Re: "Emergency fund" irony
« Reply #3 on: July 11, 2014, 03:09:55 PM »
I don't keep an EF per se, but I have a high interest checking that typically has some funds in it as I save for things. Also, credit cards, a HELOC, there are many ways like you said to float some cash in emergencies.

.. when my debit card information was stolen, with over $1100 in charges made in a few hours (How does someone spend $830 at Rite Aid? I don't even want to know).

In a related story, I received a bunch of fraud alert texts/emails last night around 9:00 from chase on our credit card. They were denied a $175 purchase at a high end retail clothing store, but I noticed 3 transactions that went through and I notified chase. They were a total of $525 at Walgreens (rite-aid's cousin)! WTF?

I've never spent more than $40 at a Walgreens and even that is excessive. My wife and I were brainstorming and figured maybe it was related to cold/flu meds and Meth production, but I'm pretty sure that's all tightly regulated so I don't know.

Cheddar Stacker

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Re: "Emergency fund" irony
« Reply #4 on: July 11, 2014, 03:25:04 PM »
I have a tiny EF and an insane amount of credit spread across a few cards from different providers.

As to how people can spend that much at Walgreens-  prepaid debit cards

Would that show up as $211.45, $206.39, and $108.44? It was three charges right in a row for non-rounded amounts, all yesterday evening.

Cheddar Stacker

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Re: "Emergency fund" irony
« Reply #5 on: July 11, 2014, 03:34:10 PM »
I have a tiny EF and an insane amount of credit spread across a few cards from different providers.

As to how people can spend that much at Walgreens-  prepaid debit cards

Would that show up as $211.45, $206.39, and $108.44? It was three charges right in a row for non-rounded amounts, all yesterday evening.
It can. Different providers charge different fees for them (ie. Amex cards are more expensive than Visa) and they usually aren't even dollar amounts and they can buy a candy bar with it to be less obvious. My bank will actually stop a purchase if you spent the exact same amount of money in the same store earlier that day. I'd guess the people who got yours bought two $200 cards, one $100 one and some snacks.

Makes sense. Well, luckily the liability is on chase and not me, but I guess eventually all this fraud costs consumers. And unfortunately we are all consumers no matter how much we try not to be, we just have a lower consumption rate than average. Thanks for the insight.

Michael792

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Re: "Emergency fund" irony
« Reply #6 on: July 11, 2014, 03:39:28 PM »
rocklebock- Thanks for the post, that's definitely not something I'd ever thought of. I'll need to employ your wisdom when I get out of debt :D

Maigahane- That's actually really good information to have. I'm glad that lurking around these forums pays off :D

rocklebock

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Re: "Emergency fund" irony
« Reply #7 on: July 11, 2014, 03:48:16 PM »

As to how people can spend that much at Walgreens-  prepaid debit cards

A-ha! Or gift cards. Totally makes sense now.

slugline

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Re: "Emergency fund" irony
« Reply #8 on: July 11, 2014, 03:57:26 PM »
Sounds like a story with a reasonably happy ending. My takeaway is that it's not a bad idea to have your "emergency fund" diversified so you have alternatives in different scenarios.

Sdsailing

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Re: "Emergency fund" irony
« Reply #9 on: July 11, 2014, 07:17:13 PM »
I'm glad the money was recovered.  This is just one more reason why I do almost all of my spending using credit cards, as opposed to debit cards.  If someone is fraudulently using my credit card, that money isn't being pulled from my checking account. 

Plus, you know, free rewards :)

+1

Also, have multiple credit cards.  This will also help to raise your credit score.

brewer12345

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Re: "Emergency fund" irony
« Reply #10 on: July 11, 2014, 08:05:26 PM »
This may seem old fashioned, quaint or even foolhardy, but in addition to diversified cash accounts, access to credit and the like, its not a bad idea to keep a wad of folding money around the house.

lizzzi

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Re: "Emergency fund" irony
« Reply #11 on: July 11, 2014, 08:13:40 PM »
Emergency preparedness folks usually recommend keeping some cash at home, just in case you have to make a fast evacuation and get out of town (Hurricanes, forest fires, etc.) I have heard recommendations of $1000 or so.

rocklebock

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Re: "Emergency fund" irony
« Reply #12 on: July 11, 2014, 10:20:04 PM »
I'm glad the money was recovered.  This is just one more reason why I do almost all of my spending using credit cards, as opposed to debit cards.  If someone is fraudulently using my credit card, that money isn't being pulled from my checking account. 

Yeah, the funny thing is, I hardly ever use my debit card for much the same reason. You have so much more protection using your credit card. I use it at ATMs, and very very seldom for anything else. Never anything online. So who knows where someone got hold of the number. My SO just had some fraudulent charges on his debit card yesterday (fortunately it was a lot easier to deal with in his case), so we're going to sit down and see if we both used our cards in the same place at the same time.

SwordGuy

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Re: "Emergency fund" irony
« Reply #13 on: July 11, 2014, 10:28:19 PM »
What happened to you is one reason why I won't use a debit card and stick with credit cards.

The banks say the protections are the same, but they aren't.

If someone defrauds with my credit card, the bank is out the money.

If someone defrauds with my debit card, I'm out the money.  Maybe the bank will refund me, maybe they won't, and maybe they will but they'll take their own sweet time.

EricL

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Re: "Emergency fund" irony
« Reply #14 on: July 12, 2014, 01:22:38 AM »
I always like the variations on "Do I need an emergency fund?" on this forum, and it's interesting to see how many completely different answers that come up, and the disparity of how much cash different people keep on hand. For many years I've kept somewhere between $5k-$10k in a savings account.  Some of it gets allocated to my Roth IRA, vacations, and larger planned purchases, but I always keep a minimum of $5k in there as an emergency fund, just in case something really bad happens (Or the Mercedes 300D Turbodiesel of my dreams pops up, and I need CASH NOW). Anyway, that's the number that I feel comfortable with. It's mostly an emotional decision.

Well, I've never, ever had a need for that emergency fund. Until late last month, when my debit card information was stolen, with over $1100 in charges made in a few hours (How does someone spend $830 at Rite Aid? I don't even want to know). My bank notified me quickly, but due to a whole shitstorm of Kafkaesque machinations on their part, plus the fact that I don't live anywhere near a physical branch, I had no access to my money for 9 days. No online banking. No ATM access. No money in checking until they processed a credit for the fraudulent purchases. Wow, good thing I have that emergency fund! Except - you guessed it - I also could not access my emergency fund during that time. Oops.

So my credit card and cash borrowed from my SO became the emergency fund for 9 days. Which happens to approximate the approach recommended by the "You don't need an emergency fund" camp on this board.

There's no moral here, except that if you are in the "I need an emergency fund" camp, you might want to set it up so you can access it outside of your normal banking routine.

Ack.  Thanks for that.  I was going to post something about why an emergency fund isn't that necessary.  After all, I can secure money from investments easily within a working week.  Unless I'm paying a ransom I wouldn't need them sooner.  Unless my ATM card got jacked and my out of state bank froze my account - which is where I would have to transfer money from my investments.

agent_clone

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Re: "Emergency fund" irony
« Reply #15 on: July 12, 2014, 01:44:33 AM »
I'm glad the money was recovered.  This is just one more reason why I do almost all of my spending using credit cards, as opposed to debit cards.  If someone is fraudulently using my credit card, that money isn't being pulled from my checking account. 

Yeah, the funny thing is, I hardly ever use my debit card for much the same reason. You have so much more protection using your credit card. I use it at ATMs, and very very seldom for anything else. Never anything online. So who knows where someone got hold of the number. My SO just had some fraudulent charges on his debit card yesterday (fortunately it was a lot easier to deal with in his case), so we're going to sit down and see if we both used our cards in the same place at the same time.

It was probably one of the ATMs you use.  Some people in Australia were/are putting devices on the ATMs to read the card and pin information then use them nefarious uses.

Doomspark

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Re: "Emergency fund" irony
« Reply #16 on: July 12, 2014, 01:45:46 AM »
Wow, this was a real eye-opener.  Going to have to consider how to address it. 

shadowmoss

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Re: "Emergency fund" irony
« Reply #17 on: July 12, 2014, 05:25:15 AM »
This is why I have checking/saving accounts at 2 banks, a local credit union and an on-line bank.  The only thing I use the on-line account for is to move money around and if I really need to get cash from an ATM and have mis-calculated my cash needs and don't have it in the credit union account.  If either one get locked, I can access money from the other one.  There is no link between the 2 except for me, so any defaults on the banks behalf shouldn't affect the other one.

I also have several credit cards, one I only use enough to keep active (a tank of gas every month or so), specifically to use in case of emergency.

Davids

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Re: "Emergency fund" irony
« Reply #18 on: July 12, 2014, 07:46:27 AM »
This is the reason why I never use a debit card. I always pay with credit and for the couple places I shop at where they do not take credit card (i.e. Aldi) I go to my bank and withdraw cash directly, do not use ATM. I do have an emergency fund through ING (well now Capital One 360).

Prairie Gal

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Re: "Emergency fund" irony
« Reply #19 on: July 12, 2014, 08:52:47 AM »
This is good food for thought. I have my emergency fund in a couple of different on-line banks, but since it is all funnelled through my bricks and mortar credit union, I could be SOL if that account were frozen for 9 days. I might have to re-think this.

rocklebock

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Re: "Emergency fund" irony
« Reply #20 on: July 12, 2014, 07:55:51 PM »
Most of you will probably not have the specific problem I did unless you're also nowhere near your bank branch. The lag would have been 4-5 days instead of 9 if I'd been able to walk into my bank to reset my PIN. But I'm glad my experience was helpful to some.

ch12

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Re: "Emergency fund" irony
« Reply #21 on: July 12, 2014, 09:04:26 PM »
This is why I have checking/saving accounts at 2 banks, a local credit union and an on-line bank.  The only thing I use the on-line account for is to move money around and if I really need to get cash from an ATM and have mis-calculated my cash needs and don't have it in the credit union account.  If either one get locked, I can access money from the other one.  There is no link between the 2 except for me, so any defaults on the banks behalf shouldn't affect the other one.

I also have several credit cards, one I only use enough to keep active (a tank of gas every month or so), specifically to use in case of emergency.

This may seem old fashioned, quaint or even foolhardy, but in addition to diversified cash accounts, access to credit and the like, its not a bad idea to keep a wad of folding money around the house.

I'm possibly in the top 10% of most paranoid about my emergency fund of Mr. Money Mustache forum members. I first read the underlined bit as having 2 banks plus a credit union account AND an online bank...as in the first 2 were brick-and-mortar banks. That was probably me projecting. (Yes, I understand NOW that it's 2 banks total.)

I've got accounts at Chase, CapitalOne, BankSimple, and Community Bank of Pleasant Hill. I used to have accounts at my university's credit union because I was too lazy to drive to the Chase bank in town and just wanted to walk to a bank. I also needed an account that wasn't shared with my parents. I also used to have accounts at Fifth Third, but my mother accidentally closed them. 5/3: You have $XXX in an account. MOM: That's stupid. Just put it in one. [accidentally steals my money that's in a joint account.] In the spirit of financial simplicity, I'm quite glad that I'm down to four banks. I probably don't want to go lower than this, because I do use them for different things.

I also keep a bit of the folding stuff on hand, cleverly hidden in a place that isn't my mattress OR drawer.

If I had a fraud problem, then I'd still have cards from two other banks to use, as well as the cash on hand that I've got (I lost my wallet on my last night in Ecuador, and never replaced my CapitalOne card after cancelling it)....basically you got hit with a relatively rare event that I, in my paranoia, am extremely prepared for and pay some opportunity cost to maintain.

Ricky

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Re: "Emergency fund" irony
« Reply #22 on: July 12, 2014, 09:12:54 PM »
The only emergency fund I believe in is this pile of gold sitting right next to me at all times. I know that in a true emergency, anyone will accept it!

Full disclosure: I own 0 gold. Sarcasm intended.

brewer12345

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Re: "Emergency fund" irony
« Reply #23 on: July 12, 2014, 09:39:40 PM »
The only emergency fund I believe in is this pile of gold sitting right next to me at all times. I know that in a true emergency, anyone will accept it!


I feel that way about a loaded 12 gauge: the Apocalypse Express Card, accepted everywhere.

Cheddar Stacker

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Re: "Emergency fund" irony
« Reply #24 on: July 13, 2014, 07:32:21 AM »
The only emergency fund I believe in is this pile of gold sitting right next to me at all times. I know that in a true emergency, anyone will accept it!


I feel that way about a loaded 12 gauge: the Apocalypse Express Card, accepted everywhere.

Accepted everywhere whether they like it or not. Its hard to deny that currency.

horsepoor

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Re: "Emergency fund" irony
« Reply #25 on: July 13, 2014, 12:35:40 PM »
Good food for thought.  I think I'm going to move my EFund out of the savings that's linked to my checking account, and put it in the credit union acct. I already have due to my unmustachian car loan.  It has occurred to me that the EF could end up getting tapped in the case of a debit card issue causing checking overdrafts.  Better to have it at a different financial institution altogether.

avongil

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Re: "Emergency fund" irony
« Reply #26 on: July 13, 2014, 12:39:38 PM »
This one is in my town next to me. http://allentown.craigslist.org/cto/4500647050.html
Too expensive for the condition, but I have seen them in the 10K+ range in that color.

I'm looking for a dreamy one too.

Nords

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Re: "Emergency fund" irony
« Reply #27 on: July 13, 2014, 03:02:11 PM »
This may seem old fashioned, quaint or even foolhardy, but in addition to diversified cash accounts, access to credit and the like, its not a bad idea to keep a wad of folding money around the house.
Except for Brewer, you people seem to have forgotten how to live through a natural disaster where the ATMs (and credit/debit machines) lose electrical power for a few days.

We keep a little cash around the house for "the hurricane fund". 

brewer12345

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Re: "Emergency fund" irony
« Reply #28 on: July 13, 2014, 03:14:10 PM »
This may seem old fashioned, quaint or even foolhardy, but in addition to diversified cash accounts, access to credit and the like, its not a bad idea to keep a wad of folding money around the house.
Except for Brewer, you people seem to have forgotten how to live through a natural disaster where the ATMs (and credit/debit machines) lose electrical power for a few days.

We keep a little cash around the house for "the hurricane fund".

Even in a few days power outage I doubt I would really need cash unless it became necessary to flee.

Workinghard

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Re: "Emergency fund" irony
« Reply #29 on: July 13, 2014, 03:21:01 PM »
Don't have to worry about hurricanes where I live.  Haha. 

We recently got a new credit card with a chip in it. Within a week fraudulent charges showed up. They froze it right away. Showed up at Walgreens, Red Lobster, grocery store, etc. My dad had the same problem a couple weeks ago. Makes me wonder if one of the gas stations has a reader attached. 

This may seem old fashioned, quaint or even foolhardy, but in addition to diversified cash accounts, access to credit and the like, its not a bad idea to keep a wad of folding money around the house.
Except for Brewer, you people seem to have forgotten how to live through a natural disaster where the ATMs (and credit/debit machines) lose electrical power for a few days.

We keep a little cash around the house for "the hurricane fund".

Paul der Krake

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Re: "Emergency fund" irony
« Reply #30 on: July 13, 2014, 03:27:26 PM »
I have enough cash around the home and hidden in the car to use as gas money to reach either border, should racial tensions become unsurmountable and an angry mob start targeting middle class white dudes.

However, the plan breaks down if the mob has infiltrated the ranks of gas station clerks I would need to interact with in order to pump gas...

Tempe

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Re: "Emergency fund" irony
« Reply #31 on: July 13, 2014, 03:48:54 PM »
I will have to keep that in mind if I ever end up having the same issues. Eventually I plan to open some accounts with another bank for the credit card/account bonuses/cashback stuff. I do end up accumulating a lot of cash around the house each month since I get tips at work. The bf actually gets annoyed sometimes since after a tiring day at work I empty my pockets on the nearest surface, with means a lot of cash floating on the counter, under the bed, and on the table and bookshelf. The only time my credit card was frozen was when I moved states and forgot to change my info. I purchases about 200-300$ in things  to stock my new place, and the next purchase I tried to make was on some 5$ gloves and the card declined.

Another Reader

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Re: "Emergency fund" irony
« Reply #32 on: July 13, 2014, 04:00:09 PM »
Living in California, the land of earthquakes and fires, we are drilled with the emergency supply routine ad nauseum.  One set of supplies and important papers for evacuation, another set of supplies for hunkering down for 10 days to two weeks.  I have bottled water in the car and strategically located around the house and garage.  If half the house collapses, I'm good for a week.

After the Loma Prieta earthquake knocked out the power, my neighbor made it down the hill just in time to get the last bucket of chicken at KFC.  When I finally got home from work half an hour after he got home from the "hunt," I was invited to dinner with the family.  In most true emergencies a supply of food you can eat without refrigeration or cooking and potable water trump a wad of cash.  The power was out for two days, so there was a lot of grilling of defrosting meat around the neighborhood.  No one had any ice for sale, so it was use it up or lose it.

The cash is more useful for getting out of the area after things have settled down.

ch12

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Re: "Emergency fund" irony
« Reply #33 on: July 13, 2014, 07:16:08 PM »
I have enough cash around the home and hidden in the car to use as gas money to reach either border, should racial tensions become unsurmountable and an angry mob start targeting middle class white dudes.

However, the plan breaks down if the mob has infiltrated the ranks of gas station clerks I would need to interact with in order to pump gas...

Paul, in this scenario, is your card deactivated and the entire financial system down? I feel like normal banking rules would be a hypothetical layer of protection against the angry mob with pitchforks.

Paul der Krake

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Re: "Emergency fund" irony
« Reply #34 on: July 13, 2014, 07:48:43 PM »
I have enough cash around the home and hidden in the car to use as gas money to reach either border, should racial tensions become unsurmountable and an angry mob start targeting middle class white dudes.

However, the plan breaks down if the mob has infiltrated the ranks of gas station clerks I would need to interact with in order to pump gas...

Paul, in this scenario, is your card deactivated and the entire financial system down? I feel like normal banking rules would be a hypothetical layer of protection against the angry mob with pitchforks.
Yes, the scenario above only applies in the event of a widespread power or banking outage, like Nords suggested. Or a zombie outbreak. The rest of the time, you really should avoid going inside gas stations altogether.

Michael792

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Re: "Emergency fund" irony
« Reply #35 on: July 13, 2014, 08:31:39 PM »
I have enough cash around the home and hidden in the car to use as gas money to reach either border, should racial tensions become unsurmountable and an angry mob start targeting middle class white dudes.

However, the plan breaks down if the mob has infiltrated the ranks of gas station clerks I would need to interact with in order to pump gas...

Paul, in this scenario, is your card deactivated and the entire financial system down? I feel like normal banking rules would be a hypothetical layer of protection against the angry mob with pitchforks.
Yes, the scenario above only applies in the event of a widespread power or banking outage, like Nords suggested. Or a zombie outbreak. The rest of the time, you really should avoid going inside gas stations altogether.

As a former day laborer, I find gas stations to be the pinnacle of civilization.

rujancified

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Re: "Emergency fund" irony
« Reply #36 on: July 14, 2014, 09:10:46 AM »
Good points! Mine EF is in a separate bank from my main bank, but I'd always assumed I'd run transactions through Main Bank as needed. Hadn't thought of your scenario and will have to make sure I can sort that out w/an in person bank visit in case of emergency.

Frugal Father

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Re: "Emergency fund" irony
« Reply #37 on: July 14, 2014, 03:50:37 PM »
This may seem old fashioned, quaint or even foolhardy, but in addition to diversified cash accounts, access to credit and the like, its not a bad idea to keep a wad of folding money around the house.
We do, too. Probably around $500 (used to be $1,000).

davef

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Re: "Emergency fund" irony
« Reply #38 on: July 14, 2014, 04:05:46 PM »
Since my wife seems to have inherated the cacheing skills of a squirrel storing its nuts for the winter, I compensate for being fairly agressive with our joint funds. She keeps about 5k in cash in her savings account as well as several wads of cash hidden in the house and car.

I on the other hand do not. I have account setup for our rental property that gets .1% interest that I consider my emerency fund. It gets the rent deposited into it and the mortgage taken out of it. I've only taken money out once in 5 years when it got over 10k and I had to add money once when the house needed a new roof.

I have all my bills set to arrive on the first week of the month. I pay them all off on the 7th and then roll over anything over 1000 in my primary checking to my investment account. On bad months, there is no rollover, but most months I roll nearly 1,000 into my fidelity individual investment account.

I keep $100-200 in my wallet at all times.

I agree with those that said not to use debit.
Use credit. Milk the rewards and take advantage of better protection. Just dont buy more than you can pay off every month.

In 14 years I never paid a penny of CC interest. I did pay one ATM fee once, and I almost had a heart attack. 

nuprin3283

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Re: "Emergency fund" irony
« Reply #39 on: July 14, 2014, 05:17:45 PM »
When WaMu went under I opened two banks. Chase and citibank and I keep half my emergency fund in each.



Zamboni

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Re: "Emergency fund" irony
« Reply #40 on: July 14, 2014, 05:44:06 PM »
My emergency fund is guarded by snakes.