11 Reasons You Don’t Need Emergency Savings
Emergency savings? Who needs it! It’s just money that could be spent on things we want now
sitting in an account doing nothing. Seriously, when’s the last time you had an emergency?
Sure, some people like to open savings accounts and stash six months of living expenses, just in
case. Instead, here are 11 reasons to just wing it:
1. Not having a cushion, keeps you on your toes. You’ll work a lot harder on the job if you
know that you have no back-up plan in the event you get fired or laid off. Six months of
living expenses could make you complacent.
2. You will have a lot bigger issues to deal with. Suppose you need emergency cash
because you’ve been injured or become ill. Money is not going to be your top priority.
So just have fun with the cash now.
3. Experts can’t even agree. Many money management experts claim you need six
months’ living expenses. Suze Orman argues that’s no longer sufficient and recommends
eight months. Dave Ramsey advocates saving $1,000 and then focusing on paying down
your debt. If they can’t make up their minds, why should you bother?
4. Emergency spending isn’t fun. If you spend your money now to buy clothing or take a
trip, you can enjoy it. Spending it on an emergency, or just using it to pay bills and buy
groceries, isn’t fun at all.
5. The experts suggest emergency savings should be boring. Experts say you should keep
your rainy-day fund in a safe, accessible, interest-bearing account, like a bank savings
account. No market speculation, commodities trading or bitcoins. Come on, what could
be more boring!
6. They want you to start right away. Like you didn’t have plans for the extra money you’ll
earn next week, right? Hadn’t you already set your heart on that pair of shoes, fishing
pole, weekend getaway or hot little car you wanted?
7. You don’t need it if you don’t worry about it. Financial advisors say emergency savings
are valuable because they give you peace of mind. But if you’re not worried about the
unexpected, you already have peace of mind! So who needs it?
8. You own a credit card. Why worry about whether you can pay for an unexpected pet
illness or home repair now when you can use your plastic to pay for it later? Sure,
there’s interest, but you probably won’t have to pay it because we’re talking about
things that are unexpected.
9. We’ve got to be done with hurricanes and flooding by now. We’ve had one weather
disaster after another the last couple of years. We’re due for some calm weather the
next few years.
10. You’ll just cut back if you have to. If you do get hit with a big bill, you can just drink less,
shop less, go out to eat less, buy less gourmet coffee and so on. It’s not that hard to
save a bunch of money if you need to.
11. You’re in good company. According to Bankrate, 59% of Americans don’t bother with
saving enough to cover one emergency. So it’s not like you’re alone. If creating an
emergency fund ran for president, it would be defeated in a landslide.
There you go, 11 reasons why you should ignore all the experts who drone on about creating a
financial cushion and live adventurously instead. For those nervous nellies who can’t live
without a back-up plan, CresCom offers a wide array of savings products, from savings
accounts and money market accounts to a host of CDs that offer security and competitive
interest rates.
But who wants to spend less than they earn?
