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Should I Save Up an Emergency Fund?

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I have been reading over and over about the benefits of saving up an emergency fund. And, a well-known author I’ve just recently looked into suggests saving up $1,000 even before you start agressively paying down debt.

I had $1,000 extra that I used to pay down credit card #2. Now I read that I should have kept it for an emergency fund?

I do not have an emergency fund and have never had one. I am living paycheck to paycheck (although there is a little more leeway now) and any emergencies that have arisen have been financed by my credit cards. When our fridge needed to be replaced, it went on the credit card. When we needed a new door, it went on the credit card. Sure, the debt was increasing, but there was no leeway back then to even think of having an emergency fund.

I just think it is more logical (for me) to forgo the emergency fund and pay down the credit cards. An emergency is just that – an emergency. You never know when, or if, it can happen. Why should I let $1,000 sit on my credit card at 16.9% interest when I have $1,000 sitting around doing nothing except waiting for an emergency?

One day, I will have an emergency fund, but I just cannot justify in my mind why I should have one at this point in my life. My financial situation just doesn’t warrant it, and I think what it boils down to is that we all have to do what is right for our financial situation. Just because everyone is doing it or there is a high-profile person promoting it – doesn’t mean that it is right for you.

Technorati Tags: emergency+fund, credit+card

I Do Not Have a Coin Jar, and Here’s Why

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Over and over again, I hear about people putting all of their change in a jar and then at a certain point, rolling up your coins and seeing how much is there. Then you use that money for some special occasion or treat.

I admit, it’s a good idea for saving for a rainy day. And what I am about to say is in no way meant to put anyone down that has a coin jar – so I hope no one takes offense.

I do not have a coin jar. Why? Because after reading how people have hundreds of dollars after a year – it makes it clear to me that the better thing to do (at least for me) is to not use cash!

If you can save your spare change in a jar and have that much – what about all the money that you loose? You know, inbetween car seats or on the ground. One time while I was working at the grocery store cashiering, there was an older gentleman that reached in his pocket for some change and a $100 bill fell out. He didn’t notice (and I didn’t either), but luckily an honest younger man behind him did – and promptly picked it up and returned the bill to it’s rightful owner.

This is a big area where my husband and I disagree. He likes cash for those everyday purchases (another reason I don’t like cash – it’s too easy to spend). He will proclaim “WooHoo” when he “finds” $1.00 in his pants pocket. My take on his “find” is that it isn’t really a “find” at all – it was money that if he lost, he wouldn’t have noticed. And it all adds up.

I believe it is much better to use checks, debit cards or credit cards (as long as the balance is paid in full every month). You can loose those too, but not as easily as change. You probably won’t go looking around when you “think” you might have lost a quarter. I spent an hour and a half searching my home for my checkbook when I couldn’t find it just the other day. Why? Because it means more than a handful of change.

Everything adds up. Might as well use the best method around of keeping it all in one place. And for me, going cash-less is the way to go.

Technorati Tags: change, coin+jar, saving, saving+money

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