Comments on: Fully Fund Your Emergency Fund Now http://www.bargaineering.com/articles/emergency-fund-fully-fund-now.html personal finance blog with anecdotes, advice and commentary. Sun, 08 Nov 2009 17:32:34 -0500 http://wordpress.org/?v=2.8.5 hourly 1 By: jim http://www.bargaineering.com/articles/emergency-fund-fully-fund-now.html/comment-page-1#comment-271403 jim Fri, 25 Jul 2008 20:32:47 +0000 http://www.bargaineering.com/articles/?p=3239#comment-271403 Evan: I agree with your assessment but we are in a scenario where interest rates are more likely to climb than fall. With rates where they are now and the economic climate, there's 0% chance that the rate will fall so locking in that rate doens't make sense. Evan: I agree with your assessment but we are in a scenario where interest rates are more likely to climb than fall. With rates where they are now and the economic climate, there’s 0% chance that the rate will fall so locking in that rate doens’t make sense.

]]> By: Evan http://www.bargaineering.com/articles/emergency-fund-fully-fund-now.html/comment-page-1#comment-271399 Evan Fri, 25 Jul 2008 20:22:43 +0000 http://www.bargaineering.com/articles/?p=3239#comment-271399 Jim, Mymoneyblog just updated his %s for CDs and Savings accounts and I am posting what I posted to his readers: I would love an argument FOR the ladder cd taking into account my opinion: "I don’t get it! I have a dual system going similar to that of the author of this blog - using Wamu (3.3%) and ING (3.0%), and frankly I am confused. Lets say I have $20K in cash to chase rates with…I do not understand why I would put anything into a CD at today’s rates. Lets use the lower of the two, ING, as an example as compared to Bank of America’s CD. Lets assume I have $20K in my ING (which I don’t, but I wish I did lol) that equal approximately $600 in a year or more appropriately around $120 for 7 months ($20K * 3% = $600 then divide that by 7 for the months). Lets compare that to the Bank of America CD (20K * 4.11% = $822 then divide that by 7) = $476. $476 - $ 120 = $350 BEFORE TAXES…we will multiply that by lets say .72 (28% tax bracket) $256 AFTER taxes. I know this was all simplified math, but for $256 I will keep my liquidity. I guess the difference would be if we are talking about $100K but how often do people actually have $100K outright, i.e. not already working for them in the market. Sorry for the long post, but I want somebody to tell if I am missing something!" Jim,

Mymoneyblog just updated his %s for CDs and Savings accounts and I am posting what I posted to his readers:

I would love an argument FOR the ladder cd taking into account my opinion:

“I don’t get it! I have a dual system going similar to that of the author of this blog – using Wamu (3.3%) and ING (3.0%), and frankly I am confused.

Lets say I have $20K in cash to chase rates with…I do not understand why I would put anything into a CD at today’s rates. Lets use the lower of the two, ING, as an example as compared to Bank of America’s CD.

Lets assume I have $20K in my ING (which I don’t, but I wish I did lol) that equal approximately $600 in a year or more appropriately around $120 for 7 months ($20K * 3% = $600 then divide that by 7 for the months). Lets compare that to the Bank of America CD (20K * 4.11% = $822 then divide that by 7) = $476.

$476 – $ 120 = $350 BEFORE TAXES…we will multiply that by lets say .72 (28% tax bracket) $256 AFTER taxes.

I know this was all simplified math, but for $256 I will keep my liquidity. I guess the difference would be if we are talking about $100K but how often do people actually have $100K outright, i.e. not already working for them in the market.

Sorry for the long post, but I want somebody to tell if I am missing something!”

]]> By: jim http://www.bargaineering.com/articles/emergency-fund-fully-fund-now.html/comment-page-1#comment-271349 jim Fri, 25 Jul 2008 15:15:47 +0000 http://www.bargaineering.com/articles/?p=3239#comment-271349 Hey Gary, I just replaced my roof too and you might be able to get a 6 or 12 month 0% same as cash financing. That will give you ever more time so you can boost up that emergency fund some more (or recover it before spending it). Hey Gary, I just replaced my roof too and you might be able to get a 6 or 12 month 0% same as cash financing. That will give you ever more time so you can boost up that emergency fund some more (or recover it before spending it).

]]> By: Gary Hardin http://www.bargaineering.com/articles/emergency-fund-fully-fund-now.html/comment-page-1#comment-271344 Gary Hardin Fri, 25 Jul 2008 14:36:51 +0000 http://www.bargaineering.com/articles/?p=3239#comment-271344 Thanks for encouraging readers to keep an emergency fund. The economic challenges today can crush a family who doesn't have some spare money to take care of unexpected expenses. We discovered a couple of weeks ago our roof is leaking, and needs to be replaced. Thankfully, we have the money for a new roof in the bank (thanks to our emergency fund). If we have not disciplined ourselves to have an emergency fund, we would be in a state of panic right now, and worse, we'd have to borrow the money to replace the roof. Thanks for encouraging readers to keep an emergency fund. The economic challenges today can crush a family who doesn’t have some spare money to take care of unexpected expenses. We discovered a couple of weeks ago our roof is leaking, and needs to be replaced. Thankfully, we have the money for a new roof in the bank (thanks to our emergency fund). If we have not disciplined ourselves to have an emergency fund, we would be in a state of panic right now, and worse, we’d have to borrow the money to replace the roof.

]]> By: Jon http://www.bargaineering.com/articles/emergency-fund-fully-fund-now.html/comment-page-1#comment-271138 Jon Thu, 24 Jul 2008 18:40:39 +0000 http://www.bargaineering.com/articles/?p=3239#comment-271138 Jason, it wouldn't, I was screwing up the concept of compounding interest in my head when I typed that (I had a few beers). Elsie, if your read that, I apologize for the misinformation. Jon Jason, it wouldn’t, I was screwing up the concept of compounding interest in my head when I typed that (I had a few beers). Elsie, if your read that, I apologize for the misinformation.

Jon

]]> By: Jason http://www.bargaineering.com/articles/emergency-fund-fully-fund-now.html/comment-page-1#comment-271089 Jason Thu, 24 Jul 2008 14:17:36 +0000 http://www.bargaineering.com/articles/?p=3239#comment-271089 Jon, how would keeping them together be better as far as gaining interest is concerned? Jon, how would keeping them together be better as far as gaining interest is concerned?

]]> By: Jon http://www.bargaineering.com/articles/emergency-fund-fully-fund-now.html/comment-page-1#comment-270932 Jon Thu, 24 Jul 2008 01:45:24 +0000 http://www.bargaineering.com/articles/?p=3239#comment-270932 Of course, Jim's suggestion of laddering CDs might even be a better idea if it is feasible in anyone's particular situation. :) Of course, Jim’s suggestion of laddering CDs might even be a better idea if it is feasible in anyone’s particular situation. :)

]]> By: Jon http://www.bargaineering.com/articles/emergency-fund-fully-fund-now.html/comment-page-1#comment-270931 Jon Thu, 24 Jul 2008 01:42:13 +0000 http://www.bargaineering.com/articles/?p=3239#comment-270931 I must admit that I haven't explored the ING subaccount options. Are they considered as part of your main savings account, and do they therefore garner the same interest rate? If so, that is a good option for separating funds. I must admit that I haven’t explored the ING subaccount options. Are they considered as part of your main savings account, and do they therefore garner the same interest rate? If so, that is a good option for separating funds.

]]> By: Jon http://www.bargaineering.com/articles/emergency-fund-fully-fund-now.html/comment-page-1#comment-270927 Jon Thu, 24 Jul 2008 01:38:37 +0000 http://www.bargaineering.com/articles/?p=3239#comment-270927 Ideally yes, the two should be separate in theory, but keeping them together would be better as far as gaining interest is concerned. So, keeping a savings account that included all of your funds as well as deliniating what you would need (within said account) in the case that an incident that an emergency fund might be required for might arise would probably serve you best. Ideally yes, the two should be separate in theory, but keeping them together would be better as far as gaining interest is concerned. So, keeping a savings account that included all of your funds as well as deliniating what you would need (within said account) in the case that an incident that an emergency fund might be required for might arise would probably serve you best.

]]> By: Elsie http://www.bargaineering.com/articles/emergency-fund-fully-fund-now.html/comment-page-1#comment-270913 Elsie Thu, 24 Jul 2008 00:08:34 +0000 http://www.bargaineering.com/articles/?p=3239#comment-270913 While I understand the importance of having an emergency fund (with 6+ months expenses), I have always wondered if that was supposed to be separate from a savings account. I know you can put your emergency fund money in a savings account, but are you supposed to have a separate savings account in addition? Thanks for any info you can share. While I understand the importance of having an emergency fund (with 6+ months expenses), I have always wondered if that was supposed to be separate from a savings account. I know you can put your emergency fund money in a savings account, but are you supposed to have a separate savings account in addition? Thanks for any info you can share.

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