I am re-reading Morgan Housel’s The Psychology of Money this year and I highly recommend this book to everyone!
There are many nuggets of money wisdom in that book. I try hard to resist my urge to share everything I read and learned from this cool book. But today I read the following that reminded me why I save personally: no reason.
Save. Just save. You don’t need a specific reason to save.
Saving for things that are impossible to predict or define is one of the best reasons to save.
Savings that aren’t earmarked for anything in particular is a hedge against life’s inevitable ability to surprise the hell out of you at the worst possible moment.Chapter 19, All Together Now, The Psychology of Money.
I think this is also the world’s best definition of emergency fund.
This is why when my neighbors knocked on my door last Christmas Day to inform me about the crack we made in their bedroom window (by a misfired $7 dart off our fence), I was truly, genuinely happy to spend whatever is needed to get their double-glazed window fixed. I know I saved no-reason funds for unexpected surprises like this.
In the end, it cost me $350 and I paid that with no regrets or stress!