query: How does the importance of a cash emergency fund change when you live in a country with nationalized healthcare?

positive: Unanticipated unemployment is usually the triggering factor for drawing on an emergency fund. Ask yourself: what happens if I lose my job tomorrow? Or my spouse becomes unemployed? What happens if I become disabled and can't work for x amount of time? Sure, you can discount your chances of needing such a fund if you have free health care. But having health insurance doesn't change the fact that an emergency fund is a good idea. There are many ways to go broke!

positive: The issue is how likely you will have zero income for six months, and what are your monthly expenses. If you know the maximum medical bill you face that may allow you to save a smaller amount. But you still have to protect for that loss of income. The interuption could be because of job loss, medical emergency, or other family crisis.  If I told you that  the chances you would face a crisis dropped by 50%, would you decide that the need for an emergency fund went away? Or would you still create a fund? I think the need still exists just to avoid the downside if you aren't prepared.

positive: There are, of course, many possible financial emergencies. They range from large medical expenses to losing your job to being sued to major home or car repairs to who-knows-what. I suppose some people are in a position where the chances that they will face any sort of financial emergency are remote. If you live in a country with national health insurance and there is near-zero chance that you will have any need to go outside this system, you are living with your parents and they are equipped to handle any home repairs, you ride the bus or subway and don't own a car so that's not an issue, etc etc, maybe there just isn't any likely scenario where you'd suddenly need cash. I can think of all sorts of scenarios that might affect me. I'm trying to put my kids through college, so if I lost my job, even if unemployment benefits were adequate to live on, they wouldn't pay for college. I have terrible health insurance so big medical bills could cost me a lot. I have an old car so it could break down any time and need expensive repairs, or even have to be replaced. I might suddenly be charged with a crime that I didn't commit and need a lawyer to defend me. Etc. So in a very real sense, everyone's situation is different. On the other hand, no matter how carefully you think it out, it's always possible that you will get bitten by something that you didn't think of. By definition, you can't make a list of unforeseen problems that might affect you! So no matter how safe you think you are, it's always good to have some emergency fund, just in case. How much is very hard to say.

negative: "First of all, kudos for thinking about budgeting at 21 years old.  So many people don't plan with their money, and years later wonder where it all went. You are doing a lot of things right with your budget.  You've got saving goals, namely your next car and a down payment on a house.  You are saving almost 20% of your income for retirement, which is amazing. I like the luxury fund, too.  It is good to put some money aside that you can spend on whatever you want, guilt free, because you know that everything important is already planned for. When it comes to budgeting, one thing to remember is that your budget does not have to be perfect, and it is not set in stone.  If you find that your amount for ""living costs"" (which I'm assuming includes things like food, utilities, and rent) is too low, you can allocate more money to it and reduce something else.  There is no need to feel bad if you end up having to change some things around in the budget. Congratulations on being debt free!  I would encourage you to stay out of debt.  Keep the credit cards paid in full each month, and save up for your next car so you can pay cash for that, too. Another saving goal that I would recommend adding to your budget would be an emergency fund.  This is basically a pile of cash that is available to you in case something unexpected and urgent comes up that you haven't planned for.  By having the emergency fund in place, you won't be forced to go into debt due to an emergency.  The amount recommended is usually 3 to 6 months' worth of your expenses."

negative: These rumors are here just to help dollar stay alive. Euro have problems, but they are rather solvable, unlike dollar situation. Even if something wrong would happen - countries would return to their national currencies, mainly Germany & France are important here. This does not means that EuroUnion would be destroyed - some countries live in EU without Euro and they are just fine.

negative: I mean  a checkings/savings combo is fiscally responsible if you're putting a 3-6 month emergency fund in there. Hell, I'd argue that you'd be insanely bad with money not to keep an emergency fund if you got the cash to spare.  401(k),IRAs, and stocks are great investment vehicles, but having a portion of your funds be liquid is important.

negative: Though I do think it is important to have a diversified portfolio for your retirement, I also think it's more important to make sure you are at no point touching this money until you retire. Taking money out of your retirement early is a sure fire way to get in a bad habit of spending this money when you need a little help. Here's a tip: If you consider this money gone, you will find another way to figure out your situation.  With that said, I also would rather not put a percentage on this. Start by building your emergency fund. You'll want to treat this like a bill and make a monthly payment to your savings account each month or paycheck. When you have a good nine times your monthly income in here, stop contributing to this fund. Instead start putting the same amount into your IRA instead. At this point you should no longer have to add to your emergency fund unless there is a true emergency and you are replacing that money. Keep in mind that the amount of money in your emergency fund changes significantly in each situation. Sit down with your bills and think about how much money you would need in the event you lost your job. How long would you be out of work? How many bills do you have each month that would need to be covered?

negative: It depends on how immediately you think you'll need your emergency fund cash: If you anticipate running into problems where you need cash right away (e.g. you live paycheck to paycheck, and your car breaks down a lot), put it into a checking or money market account. If you don't think your emergencies will require immediate access to cash (e.g. unemployment), then put it in a savings account or CD. If there is a lot of money in your accounts that goes unused, and you want a bigger safety net, then consider investing it. Though it's generally a better idea to pay off debts at this point. I think the best idea is to split your emergency fund between your checking and savings. Maybe 20% checking and 80% savings. That way, you have some extra cash on hand when you need it, while most of your money is growing in savings.

negative: I know this is heresy but if you have funds for significantly more   than 6 months of expenses (let's say 12 months), how risky would it be   to put it all into stock index funds? Quite risky as if you do need to dip into it, how fast could you get the cash? Also, do you realize the tax implications when you do sell the shares should you have an emergency? In the worst-case scenario, let's say you have a financial emergency   at the same time the stock market crashes and loses half its value.   You could still liquidate the rest and have sufficient funds for 6   months. Am I underestimating the risks of this strategy? That's not worst case scenario though. Worst case scenario would be another 9/11 where the markets are closed for nearly a week and you need the money but can't get the funds converted to cash in the bank that you can use. This is in addition to the potential wait for a settlement in the case of using ETFs if you choose to go that way. In the case of money market funds, CDs and other near cash equivalents these can be accessed relatively easily which is part of the point. A staggered approach where some cash is kept in house, some in accounts that can easily accessed and some in other investments may make sense though the breakdown would differ depending on how much risk people are willing to take. If it truly is an emergency fund then the odds of needing it should be   very slim, so why live with near zero return on that money? Something to consider is what is called an emergency here? For some people a sudden $1,000 bill to fix their car that just broke down is an emergency. For others, there could be emergency trips to visit family that may have gotten into accidents or gotten a diagnosis that they may pass away soon. Consider what do you want to call an emergency here as chances are you may not be considering all that people would think is an emergency. There is the question of what other sources of money do you have to cover should issues arise.

negative: As for a formula, there isn't a simple one that you can apply to every type insurance. I'll try my best for a simple answer. Is the event devastating enough to change your lifestyle (looking at life necessities, not wants and nice to haves)? Is the event very likely to happen? Do you have enough emergency funds to cover such an event? Once that emergency fund is utilized, how long does it take you to restore that fund to be ready for the next event? If the event is devastating enough and is very likely to happen and you do not have the cash to cover the event, and/or it would take too long to restore that emergency fund, then it makes sense to consider insurance. Then you would have to examine if the benefit(s) outweight cost of the premium paid for the insurance. If it is pennies of premium for a dollar of benefit, then it makes sense.

negative: > Do you know what the Bahamian fiscal policies are?  Yes.  Yet are a no income, estate, and wealth tax country.  They have payroll tax that amount to almost 4%, and that us what funds their social services and infrastructure.  However, only 10% off their GDP comes from manufacturing, so they have vey little need for strong infrastructure. That would change drastically if countries stopped bringing money into the country from tourism and banking.  They are basically living off of and depending on the income of wealthy, tax strong nations.

negative: "What could a small guy with $100 do to make himself not poor? The first priority is an emergency fund. One of the largest expenses of poor people are short-term loans for emergencies. Being able to avoid those will likely be more lucrative than an S&P investment. Remember, just like a loan, if you use your emergency fund, you'll need to refill it. Be smart, and pay yourself 10% interest when you do. It's still less than you'd pay for a payday loan, and yet it means that after every emergency you're better prepared for the next event. To get an idea for how much you'd need: you probably own a car. How much would you spend, if you suddenly had to replace it? That should be money you have available. If you think ""must"" buy a new car, better have that much available. If you can live with a clunker, you're still going to need a few K.  Having said that, the next goal after the emergency fund should be savings for the infrequent large purchases. The emergency fund if for the case where your car unexpectedly gets totaled; the saving is for the regular replacement. Again, the point here is to avoid an expensive loan.  Paying down a mortgage is not that important. Mortgage loans are cheaper than  car loans, and much cheaper than payday loans. Still, it would be nice if your house is paid when you retire. But here chances are that stocks are a better investment than real estate, even if it's the real estate you live in."

negative: "I'm the contrarian on this forum. Since you asked a ""should I ..."" question, I'm free to answer ""No, you shouldn't increase your limit. Instead, you should close it out"". A credit card is a money pump - it pumps money from your account to the bank's profit margins. When I look at my furniture and the bank's furniture, I know exactly who needs my money more (hint: it's not the bank). Credit cards change people's spending patterns. In my first day of training as a Sears salesman, the use of the card was drummed into our heads. People purchase on average 25% more when they use a card than when they pay cash. That's good if you're a retailer or the lender (at that time Sears was both), but no good if you're a consumer. Build up a $1,000 emergency fund (for emergencies only, not ""I need a quick latte because I stayed up too late last night""), then savings for 6 to 12 months living expenses. Close and cut up the credit card. Save up and pay cash for everything except possibly your house mortgage. If you have that much cash in the bank, the bankers will be as willing to talk to you as if you had an 800+ score. I have lived both with and without debt. Life without debt is well worth the short term sacrifice early on."

negative: "More costs are going to be put on the consumer. But that is something that would happen all the time. Originally those systems were not built with the expectation that average life expectancy would jump from almost a factor of a third (60 to 80 years, if you wonder why the age of retirement is 65 and not more or less, check out Bismark and Kaiser Wilhelm on that subject). Additionally, the current age population pyramid of the west (and asian soon to come) is put an increasing pressure on the cost of healthcare.  Now, to me the biggest issue with the US is the belief that market driven economies will always lower prices. The problem is that the insurance companies in this country form an oligopoly with the goal to make profits. Now, here is the important question: is healthcare a ""need"" or a ""want""? If it is a ""want"" then someone can live without it but if you have an accident or anything of that type, then is it still a ""want"" or a ""need"". You can live without TV all your life and nothing bad may happen to you. No healthcare and then you can get screwed for your life.  Because people will feel compelled to save themselves and be brought to the hospital, those who can afford it or need it will pay for it. Thus you have an automatic pressure on prices as it is used by a smaller pool of people than if everyone in the country was paying for it independent of income. And because the people buying health insurance feel they need to have insurance, their price elasticity of demand will become inelastic (the price may change a lot but the amount of demand won't change much). So, if i'm a private insurance company, I will charge as much as I can because I know that people will be willing to pay more for  the same healthcare cost.   The European system will simply be a cheaper option than the US because it concentrates a larger pool of payers and is not aimed at profits. Additionally, if there were quality issues in the healthcare provided this would have been seen long ago if you compare the amount of money spent in the US and Europe on healthcare. In Europe the cost of healthcare is theoretically only the government spending. In the US it is both gvt and private spending.    Tell me what you think"

negative: Emergency funds, by the name it implies that they should be available on hand at a very short notice if needed. Conservation of principal (not withstanding inflation, but rather in absolute terms) is also a very important criteria of any kind of account that you will use to save the emergency fund. I would suggest the following breakup. The number in brackets signifies the amount of per month expenses that you can keep in that account. = total 6 months living expenses

negative: "If you're trying to hedge the ups and downs of your local residential real estate market, a REIT fund holding commercial properties across the country is not the ideal match. Here's a comparison of an index tracking single-family home prices in one region (Los Angeles) and VNQ (another popular REIT fund).  There's some correlation but there's clearly different magnitudes and sometimes different directions. With a national home price index, the correlation is only 68%, and it would be lower for individual cities. You could still use it for hedging, but there's significant ""tracker error"" risk to be considered. Unfortunately, I'm not familiar with any investment that would be a better match for individual residential markets. So, if you decide to use this, I'd also adjust the level of exposure to get a closer result. E.g. using approx. 50% VNQ and 50% cash results in a closer result after 2 years (compared to national single-family home price changes) than either 0% VNQ and 100% cash, or 100% VNQ and 0% cash."

negative: The biggest problem is what happens when you make a withdrawal if an emergency occurs. If the money was a contribution from a past year, you will not be able to put those funds back into the fund until a later date. Assume the following scenario: The limits regarding maximum annual contribution and windows when you can contribute make this an inefficient way to operate the emergency fund/retirement fund.  Retirement and emergency funds are both important. Don't co-mingle them, it leads to double counting the money when you guesstimate where you are regarding your financial goals.

negative: Determine how much you are going to save first.  Then determine where you can spend your money.  If you're living with your parents, try to build an emergency fund of six months income.  The simplest way is to put half of your income in the emergency fund for a year.   Try to save at least 10% of your income for retirement.  The earlier you start this, the longer you'll have to let the magic of compounding work on it.  If your employer offers a 401k with a match, do that first.  If not, consider an IRA.  You probably want to do a Roth now (because you probably pay little in taxes so the deduction from a standard IRA won't help you).   After the year, you'll have an emergency fund.  Work out how much money you'll need for rent, utilities, and groceries when you're on your own.  Invest that in some way.  Pay off student loans if you have any.  Buy a car that you can keep a long time if you need one.  Go to night school.  Put any excess money in a savings account or mutual fund.  This is money for doing things related to housing.  Perhaps you'll need to buy a washer/dryer.  Or pay a down payment on a mortgage eventually.   Saving this money now does two things:  first, it gives you savings for when you need it; second, it keeps you from getting used to spending your entire paycheck.  If you are used to only having $200 of spending cash out of each check, you will fit your spending into that.  If you are used to spending $800 every two weeks, it will be hard to cut your spending to make room for rent, etc.

negative: That makes sense doesn't it? Longer wait times? Won't that be the result of covering everyone?   So yes, wait times are a concern. Is that your number 1 concern? More than money or how effective the system is? You will pay almost double to wait a month less for treatment(life threatening cases still get treated as fast as they do in the US if not faster), or to see a doctor two hours sooner? You will pay more for a system that gives you less?  The quality of care is not dog shit. I don't know where you get this from. https://www.forbes.com/sites/danmunro/2014/06/16/u-s-healthcare-ranked-dead-last-compared-to-10-other-countries/#45cf82b6576f  You will find this pattern in all other legitimate studies you look at. Your dog shit claim applies to the US more than anyone. Its amazing how willing Americans are to swallow the lie that changing their healthcare system will make it worse. That the free market is the answer. Reality does not reflect that and seeing as this is the economics subreddit, I think it should be very easy for people to come up with reasons why healthcare does not behave like selling widgets.  Now, not all those systems are fully socialized. There are free market elements, for example, Germany and Switzerland are similar to Obamacare, however there is more robust regulations in those systems that help to keep costs down and quality up. The UK does have Universal Healthcare(all of them have a universal system actually, but the UK has single payer which is what I think you meant), and it goes pretty well. Even the Canadian system for all its flaws has better survival rates compared to American treatments, and at a much lower cost. Ask any Canadian if they would prefer the American system, or even if they would prefer to go back to pre-universal coverage days and any sane one would not....and Canada has the next worse system. Its marginally better than the American system, but at a much lower cost.   What you think is ideal isn't based on any real research I suspect. Its based on ideology. This is a real American problem(I think its safe to assume you are American by your claim that ~~universal coverage~~ single payer is dog shit)   If you decide what priorities are most important, and then look at the systems that exist in the world and see which ones best meet your criteria for success, it won't be a pure free market system. Every developed nation had a pure free market system at some point and each one had to switch to a better system. Nobody has switched back. The most free market system in the developed world is not only the worst performing, but also the most expensive.......as economic theory can predict due to the unique nature of healthcare.

negative: Consumers aren't the only economic participants impacted by a change in the Fed rate.... Inflation has WIDE ranging implications from the future liabilities of pension funds to the ongoing cost of our national debt.  It doesn't make sense to consider only consumer inflationary experience.  PCE is considered because it relates to consumption, which includes things paid for by other entities, like employer healthcare spend.

negative: Before starting with investing, you should make sure you are saving enough.  Living in a welfare country (France) does not exempt you from potentially needing to save large amounts of money. You state that you do not need much of an emergency day fund, but this is not true.  Being dismissed unjustly from your job is not the only way to become unemployed and not all roads lead to unemployment pay.  Being fired for cause or leaving your job voluntarily are two work related causes that will leave you without an income source.  Unexpected major expenses are another reason you might need to dip into your emergency fund. If your emergency fund is in order, the next thing to investigate is your pension and saving for retirement.  In a country with a strong pension system, you need to check how comfortable you are with its sustainability (Greece anyone?) and also whether it will adequately meet your needs.  If not, there are no 401ks or IRAs in France, but there is a relatively new personal supplementary pension plan (PERP) that you might investigate contributing to. If you're comfortable with your emergency fund and your retirement savings, then preparing for buying a house is likely your next savings goal.  A quick search shows that to get a mortgage to buy a house in France, banks will commonly require a downpayment of 20% plus various closing costs.  See for example here.  This is 40,000+ euro for a 200k euro house, which will take you several years at the rate of 500 euro / month.  France has special plans (Plan d’Epargne Logement) with tax-exempt interest for saving up for a house that you might want to investigate. In your other question, you also ask about buying a cheap car.  As you get older and possibly start a family, having a car will likely become more of a necessity.  This is another goal you can save for rather than having to take a loan out when you buy one.

negative: At some point, there will even be non wealthy nations with better healthcare.       Anyone who is well travelled, or from another country knows how horrific the US healthcare system is.   The media talks about poor people, but it's awful for the middle to upper middle class too in comparison to alternatives.        It constantly shocks me this is not a bigger public issue.  If only the general population realized what the alternative looks like.  Not perfect by any means, but so much better.

negative: "An emergency fund is very well defined, both on this site and across the web.  An emergency fund is a cash account where you keep money for emergencies so you don't need to take on debt like a loan or credit cards. Car breaks down? emergency fund can help pay that. Lose your job? The emergency fund is there to pay rent and for groceries until you're back up an running. There are several schools of thought on how much money should be in your emergency fund, but it boils down to how high your risk assessment is. Typically, the average is to have 3 months in cash available at all times (like in a savings account). It'd be better to have more, but that's a typical goal. You're also asking about investments in the comments. An emergency fund should be readily available. If you already have $10K in savings, set aside what you would need to cover a few months of bills into a cash-ready savings account, then invest the rest. Investments sometimes take time, or have penalties, if you withdraw them. Additionally, as @JoeTaxpayer so correctly pointed out, getting into the habit of maintaining a separate emergency fund helps protect your other investments from becoming a crutch and instead used to save up for larger things like a house or, especially, retirement.  See also: What expenses should be covered by an emergency fund What should I reserve ""emergency savings"" for? What expenses do most people not prepare for that turn into ""emergencies"" but are not covered by an Emergency Fund? Less than a year at my first job out of college, what do I save for first?"

negative: "If you think about it, it's really all one big pot of money.  The idea behind an ""emergency fund"" is that you want to make sure your financial life has stability: it's not going to be suddenly driven into the red, below $0.  As long as that doesn't happen, you can figure out how to live your life as you want. The reason we separate out an ""emergency fund"" is to simplify decision making.  In theory, every single purchase you make should include a consideration of how it destabilizes you.  Every $100 you spend on groceries is $100 you won't be able to bring to bear if you get fired or have a major accident.  In practice, this would be a crippling way of thinking about things.  You don't know what emergencies can hit you, nor when they will hit.  That's why they're ""emergencies.""  If you had to think about them all the time, it'd be horrible!  You would end up simply not thinking about it (like most people), and then the emergency hits when you don't have enough cash to stay solvent. The purpose of an ""emergency fund"" is to help make these decisions easier.  If you have money set aside for ""emergencies"" that you only have to think about every now and then, you can make the decisions in the rest of your financial life without too much concern for them.  You don't have to worry about that $100 in groceries because you are confident that if an emergency hits, that $100 won't be the straw that broke the camel's back because you have reserves to draw on. So you should define an ""emergency fund"" in a way which is most helpful for you to remain stable and solvent without having to fret about it too much.  For most people, the criteria for tapping that fund is very high, because the goal is to not have to think about it all that much.  If you wanted to, you could feel free to lump those ""medium predictability"" items into the emergency fund, but it just means you have to spend more time and effort thinking about the state of the fund.  Every medium predictability purchase has to come with the thought process ""what is the state of the emergency fund? Could this purchase meaningfully destabilize my ability to handle emergencies?""  Your emergency fund might yo-yo under these extra purchases, which could force you to think about the state of your emergency fund for normal purchases.  That'd be bad. Different people might want to think about things different ways.  I'm a big-picture guy, so I prefer to think about all of my assets as one big account when I make a lot of my decisions.  My wife, on the other hand, prefers not to have to think that way when she makes her purchases.  For her, having a very discrete ""emergency fund"" has great value.  For me, it has less.  So when I look at the finances, I choose to lump the emergency funds in with, say, the funds to re-do our backyard (something we are looking at doing over the next 2-5 years).  For me, that is the most natural way to deal with analyzing the risks -- I just have to be aware of how backyard purchases interact with our safety net.  My wife prefers to keep those funds separate in her head, so that she can look at how to spend money on the backyard without thinking about how it affects our emergency readiness.  While complicated, it shows that even within a household, it's possible to think about emergency funding two different ways.  (it causes minimal headaches, though a fair bit of book-keeping) So define ""emergency fund"" however suits you and your life best.  However, practically speaking, most people find it desirable to not put those medium predictability purchases into the same bucket as emergencies.  Those that do find it desirable to put them in the same bucket typically have a personal reason for why that suits their needs better."

negative: "Jeez - you want me to come over and read the articles to you as well?   >Ghana operates the National Health Insurance Scheme to provide citizens with health insurance. The level of premiums citizens must pay varies according to their level of income. Most medical facilities are run directly by the Ministry of Health or Ghana Health Service.[8]  >Rwanda operates a system of universal health insurance through the Ministry of Health called Mutuelle de Santé (Mutual Health), a system of community-based insurance where people pay premiums based on their income level into local health insurance funds, with the wealthiest paying the highest premiums and required to cover a small percentage of their medical expenses, while those at the lowest income levels are exempt from paying premiums and can still utilize the services of their local health fund. In 2012, this system insured all but 4% of the population.[11]  >Israel has a system of universal healthcare as set out by the 1995 National Health Insurance Law. The state is responsible for providing health services to all residents of the country, who can register with one of the four national health service funds. To be eligible, a citizen must pay a health insurance tax.  Now if you want to be nitpicky about whether income-based taxes levied on an individual for nation-wide healthcare counts as ""requiring a person to purchase insurance"" you can - but I think we both know that level of semantics is reserved for people who've said something stupid and now have to retreat into word games."

negative: "In the US, and in most other countries, dividends are considered income when paid, and capital gains/losses are considered income/loss when realized. This is called, in accounting, ""recognition"". We recognize income when cash reaches our pocket, for tax purposes. So for dividends - it is when they're paid, and for gains - when you actually sell. Assuming the price of that fund never changes, you have this math do to when you sell: Of course, the capital loss/gain may change by the time you actually sell and realize it, but assuming the only price change is due to the dividends payout - it's a wash."

negative: Emergency funds are defined in terms of months of tightened-belt living -- that's according to the usual gurus such as Suze Orman, Dave Ramsey etc.   They aren't for short-term emergencies like a blown transmission.  Use other money for those.  Why?  People with bad financial habits have short-term emergencies all the time, and that emergency fund doesn't have a chance of lasting.  This is just their financial habits manifesting.  Here's what an emergency fund is for.    Scenario: big economic bubble bursts.  Stock market drops 50%.  Credit dries up.  This happened in 2007 by the way.  The dominoes start falling boom, boom, boom: I'm exaggerating a bit here, but a lot of people lived at least half this stuff in 2007-11.  Nothing starts those dominoes falling like lack of cash at a key moment.  That's what an emergency fund is all about - keeping things tight-normal for long enough to get back on your feet.  If you want to keep your emergency fund in something risky -- keep a lot more of it!

negative: Keep in mind your household income is in the top 20%, which does not translate to wealth. Given a healthy income, and no debt, other then a small house payment, you probably have a decent amount of free cash flow.  This could easily be used to buy a car on time… which a lot of people do.  Congratulations on being different.   Having said that, living as you do, you will likely be wealthier than your income suggests. If you invested the amount you saved on car payments for an average car you can become a muli-millionaire. Doing that alone can put you in the top 10% of the wealthiest in this nation. Keep in mind 76% of Americans live paycheck-to-paycheck, so there is a sizable portion of the population that make more than you do, yet one costly emergency can cause them to spiral into significant financial difficulty. News flash: Emergencies happen. If I am not being clear, you are living wisely! I would recommend reading The Millionaire Next Door and The Millionaire Mind. You will understand that not following the whims of advertisers is good for your bottom line and that it is good to be different from the general population. One of my favorite stories from the author is these yuppies hires the author to find them rich people to sell their products. The author gets the rich people by offering them cash, albeit a relatively small amount considering their wealth (about $200) and lunch. The yuppies complain that the guys don’t “look rich” as there are no fancy suits or Rolex watches. One of the rich guys likes the pitch so much in inquires on how he can buy the company. There are a lot of lessons in that short anecdote.

negative: "People treat an emergency fund as some kind of ace-in-the-hole when it comes to financial difficulty, but it is only one of many sources of money that you can utilize. What is an emergency? First, you have to define what an emergency is.  Is it a lost job?  Is it an unplanned event (pregnancy, perhaps)?  Is it a medical emergency?  Is it the death of you or your spouse? Also, what does it mean to be unplanned?  Is being so unhappy with your job that you give a 2-week notice an emergency?  Is one month of planning an emergency?  Two? Only you can answer these questions for yourself, but they significantly shape your financial strategy.  Planning is highly dependent on your cashflow, and, for some people, it may take them a year to build enough savings to enable them to take 3 months off work.  For others, they may be able to change their spending to build up enough for 3 months in 1 month. Also, you have to consider the length of the emergency.  Job-loss is rarely permanent, but it's rarely short as well.  The current average is 30.7 weeks: that's 7 months! Money in an Emergency There are six main places that people get money during a financial emergency: A good emergency strategy takes all six of these into account.  Some emergencies may lean more on one source than the other.  However, some of these are correlated. For example, in 2008, three things happened:  the stock market crashed, unsecured debt dried up, and people faced financial emergency (lost jobs, cut wages).  If you were dependent on a stock portfolio and/or a line of credit, you'd be up a creek, because the value of your investments suddenly decreased, and you can't really tap your now significantly limited line of credit. However, if you had a one or more of cash savings, unemployment income, and unemployment insurance, you would probably have been OK. Budgeting for an emergency When you say ""financial emergency"", most people think job loss.  However, the most common cause of bankruptcy in the US is medical debt.  Depending on your insurance situation, this could be a serious risk, or it may not be.   People say you should have 3x-6x of your monthly income in savings because it's an easy, back-of-the-envelope way to handle most financial emergency risk, but it's not necessarily the most prudent strategy for you. To properly budget for an emergency, you need to fully take into account what emergencies you are likely to face, and what sources of financing you would have access to given the likely factors that led to that emergency. Generally, having a savings account with some amount of liquid cash is an important part of a risk-mitigation strategy.  But it's not a panacea for every kind of emergency."

negative: "Are most big US based financial institutions and banks in such a close relationship with USCIS (United States Citizenship And Immigration Services) so they can easily request the information about market traders? Yes. They must be in order to enforce the laws required by the sanctions. What online broker would you suggest that probably won't focus on that dual citizenship matter? ""Dual"" citizenship isn't actually relevant here. Nearly anyone in the world can invest in US banks except for those few countries that the US has imposed sanctions against. Since you are a citizen of one of those countries, you are ineligible to participate. The fact that you are also a US citizen isn't relevant in this case. I believe the reasoning behind this is that the US doesn't encourage dual citizenship: The U.S. Government does not encourage dual nationality. While recognizing the existence of dual nationality and permitting Americans to have other nationalities, the U.S. Government also recognizes the problems which it may cause. Claims of other countries upon U.S. dual-nationals often place them in situations where their obligations to one country are in conflict with the laws of the other. In addition, their dual nationality may hamper efforts of the U.S. Government to provide consular protection to them when they are abroad, especially when they are in the country of their second nationality. If I had to guess, I'd say the thinking there is that if you (and enough other people that are citizens of that country) want to participate in something in the US that sanctions forbid, you (collectively) could try to persuade that country's government to change its actions so that the sanctions are lifted. Alternatively, you could renounce your citizenship in the other country. Either of those actions would help further the cause that the US perceives to be correct. What it basically boils down to is that even though you are a US citizen, your rights can be limited due to having another citizenship in a country that is not favorable in the current political climate. Thus there are pros and cons to having dual citizenship."

negative: ">If we lose our reserve currency status, we would have to pay it off with a different currency.   No, a debt that comes into being as dollar-denominated remains dollar-denominated. Reserve currency status doesn't change this.  The advantage of having the reserve currency is that other countries have a strong motive to accumulate dollars. Because of this we can pay for our imports in dollars. If we no longer had the reserve currency we would lose the ability to run a persistent trade deficit without borrowing foreign currency to do so.  To some extent this would self-correct. If foreigners no longer desired to hoard dollars, the flow of dollars back in to the US would bring down the trade deficit. Going forward, we'd have to ""live within our means"" with respect to foreign trade, funding imports with exports.  Domestically every country that has its own currency, not just the US, can use that currency to fully fund its own domestic productive capacity. Printing money doesn't make a poor country rich but it does allow any country to fully realize its own potential.  >Other countries don't have the luxury of just printing out massive amounts of money to pay off their debts.  This is only true when a country borrows in a currency it doesn't issue. When a country spends in its own currency its policy space is constrained by inflation. To the extent any country uses, pegs to or borrows in someone else's currency that policy space is narrowed by the need to first borrow or earn that currency.  >if the UN followed through with its suggestion to create a global reserve currency or reverted back to the gold standard  The euro shows us where that road leads. Countries that give up monetary authority give up sovereignty and when they find themselves in a situation where the monetary policy they no longer control is at odds with their needs, their economies get torn apart.  That's why one country, one currency is good policy. Stability and maximum policy space is achieved when fiscal authority, political legitimacy and monetary authority are consolidated at the same level. It's a three-legged stool that becomes a fragile balancing act when one leg is taken away.  Also, there's a whole side discussion to be had on what the alternatives are to the dollar as a reserve currency. The dollar is in that position for a reason."

negative: "At this stage, I would think about education.  You can attend open houses, and often times real estate agents and bankers put on seminars for first time home buyers.  Borrow books from the library and I would watch some HGTV.  Many of the shows are entertaining and quite educational.   Secondly you may want to get your finances in order.  Make and stick to a budget.  Start building a down payment and emergency fund.  Pay down consumer debt/student loans.  Picking up side work or overtime will help.   You will look far more attractive to a lender if you go in with a large down payment and an emergency fund then someone with better credit scores and 100% financing.  That is if the lender does manual underwriting.  If not, then use a different lender. Once you get a budget figured out, how much of a down payment and emergency fund you need, and how much consumer debt to pay off, you can then predict when you will hit your goals.  Then you will know when you are ready to buy.  If it seems too far off, cut spending and work more if it is that important to you! You can make a prioritized list about what is most important features to you and your wife. I would wait on doing this until after you view some homes.  Open houses are a great way to do this, but be careful not to get ""house fever"" and rush into a decision.  You will get some encouragement to do so by the selling agents.   After viewing some homes, and developing your list you can get an idea as of what the home will cost.  This will further refine your budget, goals, and timeline.    I think that is a lot of work to start."

negative: You're absolutely correct. If you have maxed out your retirement investment vehicles and have some additional investments in a regular taxable account, you can certainly use that as an emergency source of funds without much downside. (You can borrow from many retirement account but there are downsides.) Sure, you risk selling at a loss when/if you need the money, but I'd rather take the risk and take advantage of the investment growth that I would miss if I kept my emergency fund in cash or money market. And you can choose how much risk you're willing to take on when you invest the money.

negative: You can't max out your retirement savings. There are vehicles that aren't tax-advantaged that you can fund after you've exhausted the tax-advantaged ones.  Consider how much you want to put into these vehicles.  There are disadvantages as well as advantages.  The rules on these can change at any time and can make it harder for you to get your money out. How's your liquid (cash) emergency fund?  It sounds like you're in a position to amass a good one.  Don't miss this opportunity. Save like crazy while you can.  Kids make this harder. Paying down your mortgage will save you interest, of course, but make sure you're not cash-poor as a result.  If something happens to your income(s), the bank will still foreclose on you even if you only owe $15,000.  A cash cushion buys you time.

negative: "Wow. It's clear I'm outnumbered.  When I'm approached with the question (and keep in mind, it's usually a couple data points and little else) ""I am getting started, with no other money do I fund a retirement or emergency account?"" I often suggest they put the funds into a Roth, in a money market fund, and treat it like an emergency account. If there's in fact an emergency, there's no penalty to withdraw the deposit and we're talking peanuts for interest today.  With no emergency, two things could happen: A) As the account grows beyond what's needed for emergencies, the excess can be invested long term. B) As the investor earns more money and saves up enough to have a true emergency account separate from the IRA, the Roth can be fully invested long term. The 'Bad idea' stems from the view that one is using their Roth as an emergency account, which of course is bad. The subtle difference is one has no retirement savings and puts their Emergency account into the otherwise unused Roth. As time passes, they've protected more funds to grow tax free.  In the end, the most important thing is whether the person is saving and not tapping for simple non-emergency things. I'd rather see a guy with $25K in his Roth and no other funds than to have $5000 in his bank account because every time it gets larger he feels compelled to spend it.  My answer to Matt is to treat it for now as you intended, low risk, CD or cash (money market)."