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Personal Finances / Credit Cards and Consumer Debt
|Subject: Re: Settlement||Date: 1/4/2013 4:47 PM|
|Author: Windowseat||Number: 306630 of 309252|
I mean yeah, it's subject to market ups and downs, but he could always yank a thousand bucks out of it and have it back into his local account just as fast as some of those other options. So why is everybody suggesting the money ought to be designated as an emergency fund specifically?
Because his investments are untouchable. Did you read that first link I posted? He was in pain, absolutely miserable, but he had to go back to work because he had to pay his credit cards. He was not willing to withdraw the money from his account to pay a current bill. I don't care where he keeps the money (except that I don't recommend keeping it in the checking account, particularly if his parents snoop) but I think he should keep an amount aside, even if it's just mentally, to be used in dire situations. I also think he should pay off the credit cards, especially since they don't really amount to much, but apparently he's unwilling to do that.
As I said, I keep my emergency fund in a couple of places, including an online savings account and a money market at Vanguard, which is where my 401(k), my IRA, and my Roth IRA live. (I have another 401(k) elsewhere). It's money that I keep out of my checking account, mostly because I don't want to view it as money that can be spent.
But he's not willing to do that. Every penny he makes goes to investing. I get that he doesn't think much of his parents' spending habits, and he's trying to protect himself from a penniless old age, but I really think he's pushed too far in investing, and isn't willing to look at his financial habits as a whole.
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