Why you may not need an emergency fund

Paying down your mortgage could be better than stashing away cash.

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From the September/October 2013 issue of the magazine.

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Many experts suggest saving six months of living expenses for emergencies like a job loss. But, says Toronto fee-only planner Jason Heath, if you’re in a stable household it makes more sense to use that money elsewhere, and open a home equity line of credit to draw on in the event of a crisis. Consider what happens if you take $20,000 in emergency fund money from your high-interest saving account and instead apply it to your mortgage.

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3 comments on “Why you may not need an emergency fund

  1. It even looks better to pay down the mortgage because the interest earned in a bank account is taxable.

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  2. Money in a high-interest savings account will be there when you have an emergency. Credit can be withdrawn just when you need it most. I prefer cash savings because I control them. I would consider the extra $640 it would cost me per year in this scenario just like EI premiums and home insurance. It hurts a little to pay it at the time but hurts worse not to have the coverage if disaster strikes.

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  3. Bur really folks.But isn’t there really some thing delicious about getting into bed at night and sleeping under a ( No matter how humble) All yours PAID IN FULL ROOF…Isn’t there though?

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