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.


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.


  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 Credit can be withdrawn just when you need it most.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.


  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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