Emergency Fund IV

Let me dissect the 4 excuses (read bullshit) given for not having an emergency fund in reverse order: 

• Some other bull Shit:Since this is anyways bullshit I need not examine this. 
• I can always call fall back on my parents in case of emergency:  Your parents have raised you cleaned your nose and god knows what else and gave you pocket money and I am pretty sure paid for your education. Now when you are an adult and have a job you want to go back to your parents because you were stupid enough to blow all your money.  I think a little bird  has more decency than you who also flies out of the nest once it grows it wings. If you still want to go for this option why don’t you change your middle name to “ Parasite”. If you plan to call your wife's parents in case of emergency than you are not parasite as I do not want to offend Parasites by comparing you to Parasites.
• Credit Card: Sure you have a Uranium credit card with 3 Lakh ( replace 3 lakh with your combined credit card limit on all cards) limit but remember it is Uranium ( the Credit Card company misspelled it as Platinum). The toxic effects of using your Uranium credit card when you don’t have money to pay back on payment date are going to be disastrous and last for a long time. Also remember the very purpose of having an emergency is fund is so that you do not have to use high interest rate loans ( that is what credit cards are) in case of emergency.
• Stable Job: My friend even the President of USA does not have a stable job what about you and me.  Most of us are dependent on a hundred things for stability of our jobs. A takeover in US , a better product in Japan, a cheaper clone in China,  a stupid policy in New Delhi anything can take away our job. So never rely on your job to pay for emergencies. And also remember one of the biggest emergency you can have is “Not Having a Job” 

Next blog we will examine what can go wrong if you do not have an emergency fund.

Thanks for reading.

Emergency Fund III

So what will happen if you don’t have an emergency fund?

Before that let us look at the arguments given for not having an emergency fund: 

1. I have a stable job so why do I need an emergency fund. I will get my pay check any ways
2. Even if I don’t have money in an emergency I have my platinum/gold/diamond credit card.
3. I can always call fall back on my parents in case of emergency.
4. Some other bullshit

Which one of the above bullshit you have been telling your self in order to not have an emergency fund?

We will examine each one of the above reasons in our next post.

Thanks for reading.

Emergency Fund-II

So continuing my monologue on financial emergency let us look at what can constitute a financial emergency, but before that let us look at what in my opinion not a financial emergency J

1.       The new i-phone/ipad/blackberry... whatever

2.       An evening at a night club

3.       Jimmy Choos

4.       Membership to the Gym

The surprising part is so many time the money we are saving for a rainy day is used for things that we justify as “” OH BUT I NEED IT””, while what we should be saying “” <^&*  do I really need it?

I think if we are able to ask this question every time we are swiping the credit card or opening our wallet to take out crips MGs, we will be able to start first baby steps towards financial Nirvana J J J

Thanks for reading.

Emergency Fund

I was enjoying the   post Idli Sambar Sunday Slumber when suddenly the door bell screamed.  Too lazy to get out of my sofa cum  bed jyada; I just listened to the lady of the house talking to one of our neighbours. The synopsis of the conversation was that she has to pay to the maid and she did not have any cash in hand. So my wife gave the interest free loan to the neighbour with sweet assurance of returning it along with the sugar that she borrowed since she was any way here.

I was a little puzzled as we live in an apartment complex where you come to know if your neighbours are out of town because the newspaper keeps on accumulating at the door step due to non collection. The little financial devil in the detail in me started to interrogate the Mrs. On why the neighbours did not have even 700/- Rs at home for a planned expense like the salary of the maid.

To this my super smart financially 10 times savvy than me wife informed me that this has been a regular phenomenon and the padosan has been asking for various monetary as well as commodity ( onions, sugar, bag of flour) on a regular basis, if it was not for the maid then it was for the tutor to the kids or the gas vendor. It was clear to me that the neighbour has not been managing her home finances.

The surprising fact is that the family is very well to do and the husband works for a top MNC and wife is a part time consultant to a large recruitment firm. So earnings should not be an issue, it simply seems to be a case that they do not understand the concept of emergency funds.

While you need to have some money in easily cashable form like Fixed Deposit or Liquid Mutual Funds some cash at home is always a very good idea, not just to pay the maid on time but also for other situations that can happen in any households and you may need some cash.

My wife always keeps around 5000/- Rs in different denominations at home for any eventuality. We will talk more about emergency fund in a future posting.

Thanks for reading do leave a comment.