Wednesday, August 17, 2011

Emergency Funds

Soot Happens, and when it does, you need to be able to clean up; often, the bigger the mess, the more expensive it is to fix.

Yesterday, Soot Happened to me. I was driving to work and a red HOT COOLANT message displayed on my dashboard. I had been getting periodic LOW COOLANT messages and figured it had just gotten too low and bad on me for letting it. So I purchased some coolant and popped the hood (note: never do this in that order). The reservoir was over full with murky coolant, so I took it to the mechanic across the street so they could take a look at it, and probably flush the system for me.Several hours later, a leak was discovered in the seam of my radiator, and the whole thing needed to be replaced.

I had just been paid, and I had already spent most of my check on paying bills and debts, but there was enough technically available in the account to cover the expenses, but more bills to pay before the next check arrived, some already scheduled.

Enter: Emergency Funds.

Now, our main financial focus right now is debt repayment; hyper-focusing on certain family debts, to be paid off before we start saving for a house. Now, with all this debt repayment focus, it is difficult to store emergency funds for true emergencies. Any cash we store (especially if it's in anything smaller than a $100 bill) typically gets spent on little emergencies, and is never around for the big ones — like car troubles.

So, how does I save for big emergencies? I add an extra step. Our emergency funds were in silver (ended up needing all of our stores for the car). I would purchase an ounce or two each check, and put it away for emergencies.

Yesterday, after the car was fixed, when I needed to add the emergency funds to my account, I called the 3 shops in my area that deal in silver bullion to get a quote to see who would give me the best rate. We then went and sold our silver to the dealer (some of it had been purchased from the same dealer months ago), and deposited the money in our account. The extra step of selling the silver helped to prevent us from spending it until it was truly needed. Storing our emergency funds in silver could have allowed us to get more out of our silver than we used to buy it (as it happens though, it ended up very close to evening out).

It is always a good idea to have an emergency fund, even if it is small. Do what you can to ensure you have something should you need it. Even those of us who are horrible about spending that extra money can do it. We start building ours again with the next check, I suggest you do the same.

Want to do it the way I do? Look for Numismatic or Coin shops in your area. Ask if they deal in silver bullion or silver rounds. Failing that, there are a number of good places to buy 1ozt silver rounds on the internet, though I recommend caution here, as there are a number of bad places as well. If you need some suggestions, ask in the comments, I will provide some, and likely other readers will as well. Just keep in mind that while silver tends to increase or maintain its value, it can go down as well.

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