There is so much talk about emergency funds I kind of assume every one has one. But recently, thanks to No Debt Plan, it’s been brought to my attention that lots and lots of people don’t have one. Or have an insufficient one. Why?? Why aren’t people taking the time and resources to install this extremely important piece of the plan?

Seriously, why? Please tell me. What are you doing with your money if you are not putting it in an emergency fund? If you have a small e-fund and are paying off debt, then fine. But what about all the other people out there? Are you saving for retirement and not emergencies? Are you saving for your kid’s college? Are you saving for a car? Are you just not saving at all?

An emergency fund is the basis for all other financial moves. We currently have 4 months of expenses saved and will continue to save until we have 6 months of expenses. Other than debt repayment an emergency fund is the most important thing you can do with your money. (In my opinion.) It gives you power. It gives you security. It gives you peace of mind. It reduces your jealousy when your neighbor brings home his new car. I mean, hey you could have that too… if you wanted to finance your family’s security. I wish I could invent a product that could do all that, I’d be rich! But you can’t buy something that will make you feel that great. Quite the opposite.