First Person: Our Emergency Fund Includes More Than Just Cash

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Emergency funds are widely touted in the mainstream media, but such funds are often discussed mainly in terms of straight cash. While I can't deny that cash can certainly be a good way to stash emergency funds and have them at the ready, there are other aspects to consider when creating an emergency fund.

I use cash to build a portion of my own emergency fund, but there's more to my emergency fund planning than this. Sure, cash is great way to cover immediate needs, but an emergency financial reserve can be established by way of all sorts of other convertible assets, which I consider a good thing since it diversifies an emergency fund and may even help build that fund.

Government savings bonds

While it might take half an hour spent at the bank to redeem old paper savings bonds to cash, it's not so much of an imposition that it would keep me from considering such investments as part of my emergency funds. Some people snub savings bonds as poor investment vehicles, but using I-series savings bonds to combat inflation while also being able to convert them to cash relatively quickly if necessary is something that some savers like me find appealing. It's important to note that certain time restrictions do apply to cashing savings bonds, but after these restrictions are met, I find that they make for a nice addition to our emergency fund.

Metals and coins

While the commodities market may take some hard hits from time to time, it doesn't mean that metals and coins aren't a good addition to an emergency fund. For one, they're typically easy to save, since it isn't likely I'm going to run out and buy groceries with role of pre-1965 dimes; but at the same time, they're relatively easy to convert to cash if necessary by way of the local pawn or coin shop or even by selling them online.

From that big jar of collected pocket change, to more collectible coins or silver or gold coins, I find that such items can be a great addition to a cash reserve.

Convertible assets

There are certain things in a home that can be almost as good as cash. From books and CDs, to DVDs and video games, there are a variety of possessions that might be sitting in plain sight that could be converted to quick cash at a local resale shop, pawn shop, online, or by way of a garage sale. While such resale efforts might not garner what was initially paid for such items, when emergency funds are necessary, every little bit can come in handy.


A person who is self-employed (as I am) might find that outstanding accounts receivable could make for a nice addition to an emergency fund. As long as said funds are collectible in a relatively short period of time, I find no reason not to apply them toward an emergency fund. Of course each debtor can be different, and this might cause certain outstanding amounts to be set aside from an emergency fund if payment is not consistent or guaranteed; but otherwise, I find that receivables can be a great backup source of income for funding a cash reserve.

Credit Cards

While using a credit card as part of an emergency fund would likely be a last resort, it is an option nonetheless. Especially for a shorter-term emergency in which the balance could be paid off within a month or two, credit cards can play a part of my reserve currency if necessary. Even a card with higher interest rates can be a less pricey option for a short-term cashflow issue (just a month or two) than taking on something like a payday loan.

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The author is not a licensed financial professional. The information provided in this article is for informational purposes only and does not constitute legal or financial advice. Any action taken by the reader due to the information provided in this article is solely at the reader's discretion.


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