Personal Finance Blunder: Why I don’t have an emergency fund
I keep a running cash flow of about $2000 at all times to cover bills for the current and next month.
Otherwise, I have no emergency fund. Every dollar I have is invested.
Why am I doing this? A few reasons why:
The main thing to understand is my emergency fund fluctuates based on my income. If I do not work or have anything lined up, my emergency fund suddenly gets beefed up. If I work, I have a $0 emergency fund.
AM CURRENTLY WORKING
I have income coming in. I just use it to replenish my spending. Near to the end of the contract, I then hoard a little money to tide me over the next year or so.
CAN DROP MY EXPENSES
I am pretty bougie, but I can also drop that like it’s hot. I am spending comfortably now because I see income (not crazily, mind you), but my expenses are pretty chill for the most part if I mentally switch over to the dark side.
CAN DIP INTO DIVIDEND INCOME
I can simply just stop DRIP (Dividend reinvestment programs) and take that dividend income as cash to use to help pay for bills.
CAN USE LINES OF CREDIT
I also have lines of credit open at low interest rates, and can borrow that money if I need more than a thousand or two to cover bills. I’d rather leave my money invested, than to keep it in cash for so long, earning a pitiful 1.25% interest.
CAN SELL INVESTMENTS
Worst case scenario, I sell investments and use that cash. But my mental game is I will try everything possible to not sell my investments unless I need to. This is my last resort.