Comments on: Worried about your finances? Know your worst case scenario http://moneymerc.com/2009/04/20/worried-about-your-finances-know-your-worst-case-scenario/ a personal finance blog dedicated to little finance decisions with big impact Sun, 31 Oct 2010 02:27:04 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: How will you invest now? | MoneyMerc http://moneymerc.com/2009/04/20/worried-about-your-finances-know-your-worst-case-scenario/comment-page-1/#comment-161 How will you invest now? | MoneyMerc Sun, 07 Mar 2010 03:45:23 +0000 http://moneymerc.com/?p=63#comment-161 [...] in 2009, I recommended that you review your financial worst case scenario.  Maybe part of your scenario involved stocks [...] [...] in 2009, I recommended that you review your financial worst case scenario.  Maybe part of your scenario involved stocks [...]

]]> By: Alex http://moneymerc.com/2009/04/20/worried-about-your-finances-know-your-worst-case-scenario/comment-page-1/#comment-139 Alex Fri, 01 May 2009 01:59:27 +0000 http://moneymerc.com/?p=63#comment-139 @Chris: In general, I'd would say no, since the point of your emergency fund is to keep you afloat for 3-6 months or more. If you are racking up debt during this time, your problem is getting worse and worse, and you are creating a hole that you'll have to dig out of once you get a job. Keep in mind though, that knowing your worse case scenario also includes taking a real look at your skills and experience, and judging the amount of time it will take you to get a new job. If you have a English Literature degree, it might take you longer to get a job than if you were an engineer with skills to work in pretty much any industry (btw I'm not judging anyone here, I believe all disciplines are valuable in their own way... I'm just challenging you to be frank with yourselves from a finance standpoint). One last point, from a behavioral finance point of view: telling yourself you "always have your credit cards" in times get rough might cause you to make excuses not to save. That's the opposite of the goal of this post. So work to beat your brain at it's own game. Remember that an emergency fund should be full of assets not liabilities. @Chris: In general, I’d would say no, since the point of your emergency fund is to keep you afloat for 3-6 months or more. If you are racking up debt during this time, your problem is getting worse and worse, and you are creating a hole that you’ll have to dig out of once you get a job. Keep in mind though, that knowing your worse case scenario also includes taking a real look at your skills and experience, and judging the amount of time it will take you to get a new job. If you have a English Literature degree, it might take you longer to get a job than if you were an engineer with skills to work in pretty much any industry (btw I’m not judging anyone here, I believe all disciplines are valuable in their own way… I’m just challenging you to be frank with yourselves from a finance standpoint).

One last point, from a behavioral finance point of view: telling yourself you “always have your credit cards” in times get rough might cause you to make excuses not to save. That’s the opposite of the goal of this post. So work to beat your brain at it’s own game. Remember that an emergency fund should be full of assets not liabilities.

]]> By: Chris http://moneymerc.com/2009/04/20/worried-about-your-finances-know-your-worst-case-scenario/comment-page-1/#comment-138 Chris Thu, 30 Apr 2009 16:51:32 +0000 http://moneymerc.com/?p=63#comment-138 Alex, should you consider available credit on credit cards as a stop gap to any short fall you might have in your emergency fund? Alex, should you consider available credit on credit cards as a stop gap to any short fall you might have in your emergency fund?

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