this week has been a real killer at work. i've been getting online at about 7 each morning and doing an hour or so of work before heading into the office. i've been arriving to work at about 9 and work until 7 and then get back online at 9 and work til 12. hopefully, i'll just lock down the computer and not touch it this weekend, but it's never that easy for me.
look, i'm in IT and am used to some crunch time hours, but this time around, there's to big release or anything of that nature. just getting hit with a few requests late in the day or trying to catch up or just getting caught up in something or another. it's easy for me to fall into this routine.
so, today my boss rattled one of my direct reports. he expects that we essentially produce defect-free code. now, i certainly strive for that, but there are some things that just don't happen and i just don't know how to straighten the guy out. anyway, that led to drama with my employee about how he doesn't need to be treated like that -- and you know what? he doesn't -- and him trying to decide what to do with his future with my company. you know, it's 90% good and 10% bad here, and one day the 10% will just be bad enough to chase some folks out of here. we get this all the time -- my boss just doesn't react well to mistakes -- and one day it's going to be the day that my report walks. and then one day it'll be my turn.
and, that'll be the day that i'll walk out with no worries because i've got a well funded emergency fund. or, what i refer to on some days as a "go to hell" fund. now, you talk to 10 people about an emergency fund and you'll get 10 answers as to how much you need to keep. for me, right now, it's real easy for me to keep about a years salary in my emergency fund. why? well, where else am i going to put it? my 2% in savings and cd's is totally outperforming anything else right now.
Showing posts with label emergency fund. Show all posts
Showing posts with label emergency fund. Show all posts
Thursday, March 12, 2009
Sunday, April 13, 2008
cd ladder
over the past several years, i had built up a cd ladder that ended up with me owning 12 one-year cds that were maturing each month. i thought of this, in part, as my emergency fund. if we ever were strapped for cash because of loss of income, we could tap into the cd that was coming to maturity that month. well, my cds are now coming off of 5+% yields and renewing to 2-3% yields -- terrible!
what i decided to do was nothing at all. i still think of the cds as an emergency fund, so i need it to be pretty liquid, so putting that money into the stock market was out of the question. i thought about putting it into a money market or savings account, but with the fed cutting rates, those returns are getting trimmed, too. for now, money markets do seem to be returning a little bit better than cds, but it's not really significant enough for me to do anything about right now.
yup, i decided to be lazy. and to me, that's just about right for my emergency fund.
what i decided to do was nothing at all. i still think of the cds as an emergency fund, so i need it to be pretty liquid, so putting that money into the stock market was out of the question. i thought about putting it into a money market or savings account, but with the fed cutting rates, those returns are getting trimmed, too. for now, money markets do seem to be returning a little bit better than cds, but it's not really significant enough for me to do anything about right now.
yup, i decided to be lazy. and to me, that's just about right for my emergency fund.
Monday, February 18, 2008
emergency cash on hand
so, i've talked about having a cash reserve in liquid investments to cover several months of living expenses in the event of an unforeseen change in employment status, and i think it's pretty clear and reasonable why such a fund would be necessary. there are even some pretty clever ways to do that with little or no money, if you decide to go that route.
another idea that i've been bouncing around is to keep more cash on hand. what?!? why would you want something turning into cat food or burning a hole in your pocket? the main rationale for this is in the event of an actual emergency (flood, hurricane, or other natural disaster) that takes out some part of the atm or credit network fails and you can't tap into those would be liquid assets? you may need cold hard cash to buy food, water, and other survival items for a few days or maybe a week to cover your living expenses before the world rights itself again.
now, i've flip flopped on this several times -- should a big crisis come up, who knows, maybe i'd be out there looting, or maybe cash may been seen as suspect, but i figure a couple hundred bucks stashed in the fireproof safe at home in small bills has at least some merit. and, honestly, there is something quite intriguing about having a stack of twenties in there. not quite gangster lifestyle, but pretty compelling.
another idea that i've been bouncing around is to keep more cash on hand. what?!? why would you want something turning into cat food or burning a hole in your pocket? the main rationale for this is in the event of an actual emergency (flood, hurricane, or other natural disaster) that takes out some part of the atm or credit network fails and you can't tap into those would be liquid assets? you may need cold hard cash to buy food, water, and other survival items for a few days or maybe a week to cover your living expenses before the world rights itself again.
now, i've flip flopped on this several times -- should a big crisis come up, who knows, maybe i'd be out there looting, or maybe cash may been seen as suspect, but i figure a couple hundred bucks stashed in the fireproof safe at home in small bills has at least some merit. and, honestly, there is something quite intriguing about having a stack of twenties in there. not quite gangster lifestyle, but pretty compelling.
Sunday, February 17, 2008
emergency fund
i was reading a forum the other day where a lot of people were advocating keeping an emergency fund in stocks! they even had elaborate mechanisms to make sure that they would be able to stop losses. i can't say how bad an idea i think this is.
for one, an emergency fund should not be thought of as an investment vehicle. it is a pile of money that is ready so that it can be tapped into in the event of a big surprise -- loss of income or some such.
additionally, your emergency fund should be at little to no risk and be extremely liquid. now, i find that all of my stock holdings are pretty liquid, but you never know if you end up buying into a low volume stock or if a some sort of trading block happens on your stock the day you need it.
if you keep your emergency fund in a stock or stocks, you have a few issues that you have to contend with. one is that your ef may be very volatile. how can you bank 6-12 months of expenses in something that you don't know the value of day-over-day? the other thing is that if something should befall you, you stand to lose a substantial bit of money, if you have to break into your fund on a down day. even if you have standing stop loss orders in place, you bear the burden of commission charges and -- more importantly -- you have to determine another stock or set of stocks to put your money.
i keep about 1/2 of our emergency fund in cash in a checking account. the other 1/2 is in staggered 1 year cd's that mature each month and renew if i don't need them. it's valued at about 12 months of family expenses, but i'm sure that if we found ourselves suddenly unemployed, we could actually stretch that to 20-24 months.
i've heard people say that credit is good enough to use for an emergency fund. i've actually used that tactic, with extended 0% financing, but i disagree that a credit card should be used for that role, as it really only buys you about 1 month and then it's time to pay the piper.
for one, an emergency fund should not be thought of as an investment vehicle. it is a pile of money that is ready so that it can be tapped into in the event of a big surprise -- loss of income or some such.
additionally, your emergency fund should be at little to no risk and be extremely liquid. now, i find that all of my stock holdings are pretty liquid, but you never know if you end up buying into a low volume stock or if a some sort of trading block happens on your stock the day you need it.
if you keep your emergency fund in a stock or stocks, you have a few issues that you have to contend with. one is that your ef may be very volatile. how can you bank 6-12 months of expenses in something that you don't know the value of day-over-day? the other thing is that if something should befall you, you stand to lose a substantial bit of money, if you have to break into your fund on a down day. even if you have standing stop loss orders in place, you bear the burden of commission charges and -- more importantly -- you have to determine another stock or set of stocks to put your money.
i keep about 1/2 of our emergency fund in cash in a checking account. the other 1/2 is in staggered 1 year cd's that mature each month and renew if i don't need them. it's valued at about 12 months of family expenses, but i'm sure that if we found ourselves suddenly unemployed, we could actually stretch that to 20-24 months.
i've heard people say that credit is good enough to use for an emergency fund. i've actually used that tactic, with extended 0% financing, but i disagree that a credit card should be used for that role, as it really only buys you about 1 month and then it's time to pay the piper.
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