What's new

Welcome to audpi | Welcome

Join us now to get access to all our features. Once registered and logged in, you will be able to create topics, post replies to existing threads, give reputation to your fellow members, get your own private messenger, and so, so much more. It's also quick and totally free, so what are you waiting for?

Is an Emergency Fund necessary?

Hoca

Administrator
Staff member
Joined
Jan 19, 2024
Messages
453
Reaction score
0
Points
16
Is an Emergency Fund necessary?

We’ve all heard the personal finance truism: Keep three to six months of living expenses in the bank just in case. But do folks pursuing Financial Independence and Early Retirement (FIRE) really need an emergency fund?

Originally the emergency fund was conceived in response to the all too common cycle of debt and poverty. People who scrape by, living paycheck to paycheck, can be utterly devastated by an unexpected one time expense.

But we’re not living paycheck to paycheck. In a more established financially savvy household there are a couple of options instead of a traditional emergency fund:

  • We have a sizable taxable investment account that could be tapped in an emergency. Since both our checking account and our taxable investment account are held at Fidelity, we can do same day transfers between them. The downside of this is that an emergency could conceivably force us to sell assets during a down market.

Continue reading Is an Emergency Fund necessary? at Frugalwoods.
 
Top Bottom