Prompt for discussion! Should everyone have an emergency fund? If so, how many months? Are there other ways to have emergency funds besides having a liquid asset like cash? Is an emergency fund a lack of emunah?

Yes, but it doesnt need to necessarily need to be liquid. If you're living paycheck to paycheck or have intermittent income it's more necessary because your risk is higher if it goes away. For a standard w-2 employee with some leeway in their earnings and who is financially competent, I would say 1 month expenses in cash. If you really had an emergency you probably wouldn't need cash on hand the same day. You could probably rely on about 18 month of 0% credit cards, being able to pull out from investment account if you have them, etc.

Great question. I think about this all the time. I've been freelancing for the last 3 years and haven't committed to a large EF, but I always wonder what the best move is. Just curious, how do you balance a large EF with bitachon? I'm not being cheeky, and I get that saving and investing and life insurance are all real things but I'm just curious what people have thought? Could be a different thread..

The way I view it is that an emergency fund is like exercise and eating healthy. Its preventative care. You dont lack bitachon because you exercise. You're being a good steward of the body God gave you. An emergency fund is just being a good steward of the money God gave you.

that is definitely a good topic for a different thread also or this one. I think my opinion on this matter might be given away already bc my roadmap has step 21 being getting rid of your emergency fund 🙂

#livebytheflowchart lol

I guess I view it as hashem gave me a brain. That brain can learn information. I know that I keep seeing frum people doing charity campaigns bc they didn’t prepare. Therefore, the logical thing to do which would be the barebones definition of hishtadlus is to prepare for events that are not statistically insignificant, and therefore, until you no longer need one, an emergency fund is a basic part of being a yid.

Ah I have to disagree and say the barebones of hishtadlus are davenen and learning.. Great story in the Rubashkin book that shows this. I like your point though, but still wrapping my head around it.

he had an emergency fund

There is an opportunity cost to holding liquid cash. I think someone with a regular income may be better off with equity investments and some credit through credit cards or a home equity line of credit. When I eventually retire, I plan to keep about two years of expenses in cds or short term safe bonds so that I don't need to sell lots of stock after a bear market.

To add to this conversation. I personally have replaced by emergency fund with a credit line secured by my investment portfolio, this way all of my money is invested at any time and I have a sudden expense I just take out a same day loan at a lower interest rate (backed by margin loans). This is definitely much riskier than a traditional emergency fund, but for me, this works out very well.