DISQUS

Early Retirement Extreme · 1 year ago

Could also include a food storage in that plan. Not only is it good to have one in case a real disaster strikes, but it is also possible to free up so money by digging into the emergency food. Of course better hope that a real disaster doesn't happen during this time.

eric · 1 year ago

I think that food storage is a good idea. I came to the revelation at Christmas time when we were spending money on gifts and cut way back on groceries. The food that we already had stored lasted a very long time and we just rebuilt our stock after the holidays.

If you have two months worth of food staples that is two months where you will have little to no food bill.

aaa · 1 year ago

If you withdraw from Roth IRA, even if you put the money back in, you essentially decrease a given year's contribution limit.

Flexo · 1 year ago

Thanks for sharing the food storage idea, ERE. That's a great way to plan ahead to reduce your expense during an income emergency. Also, it reminds me that I need to shop for groceries.

Chief Family Officer · 1 year ago

I like the idea of an Emergency PLAN. As interest rates have fallen, I've found myself contemplating a more aggressive plan. But I'm also quite conservative and risk-averse (it's my nature coupled with the fact that I have two young kids to look out for), so I'm hesitant to branch out past our banks savings right now. I'm thinking about all of the alternatives, though.

Mike · 1 year ago

Isn't the point of an emergency plan not necessarily to earn you income, but to be there when needed? As long as your savings account can keep pace with inflation, is it really necessary to try to make money off of it?

Small Cents · 1 year ago

Well, I've been trying hard to make an emergency fund, and so far am far, far short of the experts' recommendations. But these are interesting things to think about. I do have the stockpile of food going- we could live for about two weeks on what we have, and I'm trying to build this up as well.

vh · 1 year ago

If you're really thinking of "the worst situation imaginable," in which "money itself would lose all value and society would be reduced to a system of bartering for what you need," then it would make sense to build a stockpile of highly barterable, possibly contraband goods: cigarettes, alcohol, and dope. Stash all the prescription drugs you can get your hands on; buy some cigarettes, package them air-tight and store them in the freezer; cache a case or two of vodka in the back of a closet. These items, plus (possibly) what you can raise in a backyard garden (assuming you can keep the neighbors out) would be useful in an extreme emergency. Ditto guns and ammunition.

Personally, I have a hard time working myself up to thinking in such off-the-wall terms. In the present times, I'm all for money market funds--Vanguard Prime Money Market is good--and maybe having a small stash of actual dollars hidden somewhere in the house. And, depending on where you live, a week or so of emergency provisions (food, propane, batteries, etc.).

My mind could be changed, of course...but so far, I'm not that scared.

Jerry · 1 year ago

I have an emergency fund with the several layers you mentioned. I also keep a well-stocked pantry, but I never thought of it as a part of my emergency financial plan before... I just like to cook. Come to think of it, though, a filled pantry helps me save money, too. I buy storable food (dry or canned) when it's on sale and use it as needed. This helps me keep my costs lower- which gives me more $ for my emergency fund.

Holly · 8 months ago

What about insurance? So many people don't bother to get adequate insurance or to write a will (who would take on the long-term commitment and expense of taking care your kids if you could no longer work, get very ill, or even die?). Does anybody think that flood ins. would be a bad investment? I live in a very low-laying state with wetlands in my backyard. Even though it's not considered a flood-prone area, you all know what's happening in ND right now. Besides, I remember a hurricane hitting my area back in 2003 (power was out for 4 days) and another major storm in 2004. After that, we invested $400 in a portable generator and it has come in handy.