Importance of emergency fund

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!



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