Behold your savior. The Emergency Fund.

... look to the hills ...

With the risk of sounding sacrilegious, the emergency fund is truly your savior. What is that saying when it comes to financial matters? There is no time like the present.

Maybe it's because I work in tech or because I live near that green behemoth (John Deere), but there has been a steady stream of layoffs happening quietly for a year or two now.

Every time I expect to hear good news, it's just another round of layoffs. Although driving around, you wouldn't know it. New houses are going up like popcorn, and bigger and bigger cars and SUVs are cramming the roads. You would think we are living in the golden age… heck, maybe we are.

Makes a guy wonder.

“More than two in five Americans — and nearly half of women — do not have emergency savings funds, according to a recent survey by U.S. News and World Report. The survey also found that 40% of Americans couldn’t cover a $1,000 emergency expense with cash or savings, although 60% of respondents said they had an unexpected expense pop up in the past year.”
- Banking Journal

Cash == Less Stress

Our mothers—and everyone else, for that matter —taught us from a young age that money can't buy us happiness. But the people who give us that line are the same ones who didn’t teach us that credit card debt is bad, that you should live below your means, etc. So … not sure if we can really trust them after all.

I’m pretty sure, based on the shared experience of the human race, we can graph this concept for needing an emergency fund like this ….

The truth is that most people, including you and me, live our lives with the unshaken belief that nothing will ever go wrong … ever. It’s human to do that.

We are going to live forever, never lose a job, never have a car break down, nothing will break in the house, the kids won’t need anything, you name it. But we know in our hearts that none of that is true, even if we don’t live like that on a daily basis.

I’ve had this experience for well over a few decades that I would assume isn’t limited to just myself.

• When you’re bad with money and don’t have any, you’re stressed all the time.

• When you have piles of cash, you aren’t stressed.

• When you’re cash-poor, a bad circumstance becomes worse.

• When you’re cash-rich, a bad circumstance is just a bad circumstance.

This is what an emergency fund is for. Heck, even that good Book says that “… money is a defense.” There must be something to it after all, eh?

Wait till you get older.

I’ve also experience something that maybe you have too. Life generally gets more expensive as you get older. There is probably a million reasons for that, many of them valid.

• you tend to get bigger and bigger houses

• you tend to accumulate children and other dependents

• you tend to start saving and investing more for retirement

• you tend to go on more and bigger vacations

• you tend to accumulate more expensive hobbies and “things”

• your health, and those around, have more aches and pains and doctor visits

That’s the thing with life. It gets more complicated the older you get, even if you are a good saver … I should know. I’ve been squirreling away money and investing since the day I got my first full time job. That accumulation of assets hasn’t made me free from hardship.

The good old Book also says “… man is born to trouble like sparks fly upwards …” , it’s life my friend.

I can tell you something based on experience though. All those little bumps and humps that you and I come across on our journey on this round rock, are made much less scary by a BIG OLD PILE OF CASH.

What I’m saying is that your mom or grandmother might have mislead you at best, lied to you at worst. Money can buy you certain things, one of those things being happiness in the form of lower stress levels when something goes bump in the night.

Everything is a problem when you don’t have cash, but when you do have cash, things are less of a problem … or they become more like a blip on the radar rather than the world is ending right now.

If you don’t have a large emergency fund you should. I know some of those hobbits only tell you to put 3-6 months of expenses in an account and call it a day. I guess it’s better than nothing.

Seems a little light to me. Sure you don’t want 5 years worth of cash sitting there … but have you ever known the feeling of looking a savings account and knowing you could live a year off that just laying on your couch staring out the window and never have a problem?

Nice feeling, that’s what that is … it’s call LOW STRESS.