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Author: Leguleius Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 310152  
Subject: Re: Savings vs. paying debt Date: 1/3/2000 9:15 AM
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"Those of us paying down our debt know that when the car breaks down, the refrigerator goes out, the a/c bites it, etc, and we have NO savings, up goes the debt you just worked hard to pay down. "

I agree completely. Having a realistically sized emergency savings account has meant the difference to me in situations when I would have otherwise put unforseen but necessary expenses on credit.

The only thing I would add, based on my own experiences and those of friends, is that fools who are are a little less disciplined should keep the emergency savings account at a separate bank. When I was in college, my efforts to create a savings account always failed when I would continually transfer funds from the savings account to cover checks. When I got out of school, I opened up a savings account at a different bank than the one I ordinarily do business with. Without the ability to quickly transfer funds between accounts at an ATM or via telephone, I was prevented from wasting away savings funds on impulse purchases.

Also, for those who are thinking of paying off and canceling all (or all but one) of the credit cards in their household, having an emergency savings account goes a long way toward instilling the peace of mind that is necessary.

Just my 2 cents!

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