Comments on: How important is cash in the bank?

By: Emergency Fund

Emergency Fund — Wed, 08 Jul 2009 06:26:00 +0000

Thanks for sharing such great post, according to me there are numerous reasons when we need such emergency funds. By building an emergency fund you will feel more secure because you are prepared for the facing any financial crisis.

By: Tom Tousignant

Tom Tousignant — Mon, 29 Jun 2009 12:57:17 +0000

The best way to handle a financial crisis is to prepare ahead of time, of course. But, if you are already in ‘emergency mode’, you need to find the right balance between short term survival and long term thriving. If you have stored a lot of your wealth in your house, and are able to withdraw it during a crisis, by refinancing, selling, or using an equity line, then the equity in your house can get you through the crisis. A worse option would be to leave the equity in your house and then end up having to file a bankruptcy as a result of debts acquired during a financial crisis.
In the end, having less equtiy in your house after things return to ‘normal’, or at least stable, is a better option than having a huge pile of credit card debt at high interest rates that consume all your cash. When you can re-allocate the savings from refinancing, use the right priorities – cash, debt, protection, wealth accumulation, and then pay off the mortgage.

By: Frank Mill

Frank Mill — Fri, 26 Jun 2009 14:59:45 +0000

What if you’re already in emergency mode. When refiing and pulling cash out, or pulling payments down and you can’t quite afford to re-allocate that to savings. Do you try and project a time period when you can? What’s your advice to running close to if not on the rails during this time in our economy?