Hey Jim,

I actually agree with pretty much everything you said. I wrote this article because I’ve seen too many of my friends or acquaintances think that having an emergency fund only covers saving money in like you said, a “savings account. That is why I tried to list these as alternatives to make something like keeping your emergency savings in an investment account more common. I am not trying to convince anyone to disregard saving for emergencies. Quite the opposite, I strongly believe being prepared for any emergencies is a top priority.

As for applying for credit cards, you have a pretty solid point. The size of the credit lines you already have available to you or that you can expect to get after applying is very important. It can be a very dangerous game if you simply expect to be able to pay off any expense in this manner. As with traditional emergency funds, it is common to have at least 3–9 months of expenses saved up. If you do not realistically think you can cover this with the credit lines you already have or can apply for in emergencies(be conservative since yes you will get a smaller credit line with less income), you should find ways of increasing this or building up an emergency fund with other alternatives. I also like your point that in emergencies where you are able to pay off within a few weeks it is much easier to just use existing credit lines to pay off. In some other cases, having a 9–15 month time period where you don’t have to worry about paying any interest wouldn’t hurt.

In my personal case, I am extremely blessed to be at a young age without many responsibilities and growing in my career. Although I have a very minimal amount in traditional savings accounts, I have many years worth of expenses in highly liquid assets. For people in similar situations, I would say it is simply inefficient and redundant to keep their emergency savings in savings accounts.

Cheers,

Brandon

Personal Finance Enthusiast / Post-grad Life / Just your typical boy in the Midwest

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