The Importance of an Emergency Fund

Less politely, they are called "F--- You Funds."

You need a minimum of six months, ideally a year, of liquid funds. This would be enough to cover your hard expenses if all of your income stopped: mortgage/rent, utilities, vehicle/transportation, clothing/laundry, medical/health visits and costs, groceries, necessary memberships and subscriptions, etc. You can get an over-estimate by looking at every outgoing payment out of your bank or credit union account for the past year, and totaling that up.

Why? Because your employment might change. Life changes. Emergencies happen. Disasters happen.

You want to have the fund in place so that if your employer(s) disappear, or become too much trouble, or decide they don't need you anymore, you can walk away and be OK. Do you know what it is like to be at a job mostly for the fun of it, knowing that if things are no longer fun, you can walk away and be OK? I had a time in my life like that. (Unfortunately, I made the mistake of marrying, so that changed.) Having an emergency fund doesn't turn a blah or lousy job into a fun one, but it does give you peace of mind and a lot of flexibility.

If you're truly living paycheck to paycheck, without an emergency fund, something is wrong. You need to change that somehow. Cut expenses. Get a raise. Get more work. Change jobs. Sell some of your stuff. If you have debts, pay those off, starting with the debt with the highest interest rate first.

You need to put aside as much money as you can on a regular basis until you have a full fund. Have it automatically move from your checking account to your savings account, if you can. Or into some relatively safe, liquid account like brokerage account. Once you do have that fund in place, consider continuing the diversions, to an investment account. Unless you're elderly or terminal, you should be investing and saving up. Think of it this way: plan, budget, save, invest, and insure.

Guys, this is much easier to do if you don't have a wife and kids for which to pay. If you have an emergency fund and you make the mistake of marrying, at least ensure, with a lawyer, that your emergency fund stays separate. It will help you if there is a divorce. Do what your lawyer says: Do not co-mingle that fund, do not spend it on stuff for your marriage, or for your wife. ALSO, if you get an inheritance, work with a lawyer to keep that separate as well. THAT can be your fund if you don't have one already.

Health Thyself

I'm sorry, but every time I see an ad for "Merrill Lynch Wealth Management" I have to laugh. Merrill Lynch is one of those companies that couldn't manage it own wealth, and so it ended up being bought up by Bank of America under the cloud of tax bailouts.

I laugh, but there are a lot of former employees who probably aren't laughing. Managers failed at their duties, and investors failed at their duty to known in what they were investing. And, of course, people were greedy in occupying houses they couldn't afford on the hope that the real estate market would keep skyrocketing.

Women Need to Save More (So Do Men)

Big news, brought to us by Associated Press writer Candice Choi. Women, who live longer than men (where is the outcry of sexism?), aren’t saving up enough for those golden years.

They invest more conservatively, start saving later and are more likely to be in and out of the work force, according to a study released Wednesday by Hewitt Associates, a human resources consulting firm.

The first two factors are behavioral choices made by women exercising their freedoms, and women should voluntarily address those. As for the third factor - the only reason women, in general, should be “in and out of the work force” should be for childrearing. And the only way they should be raising children is within a marriage. “Yes, but husbands leave or die,” say the women who advocate letting other people “raise” your child. That’s why women should insist in pre-nups, saving and insurance, and assist their man in staying healthy. See how conservative values work together? Choosing your husband wisely and treating him well will almost elminate the possibililty of him dumping you.

At any rate, someone will propose a government program to correct this “inequality”, I’m sure, when no government program is necessary. Or someone will bring out the tired line the women earn less than men, which isn’t true when you compare men and women doing the same kind, level, quality, and quantity of work.

The importance of saving didn't dawn on Jerre Laughlin until she was in her 40s and started working in human resources.

What was she doing until then? Spending money on shoes, purses, and trips to Cancun, figuring a fiscally responsible man would swoop in and marry her? Or counting on Big Brother?

"Women tend to be a little more risk averse, more fearful of losing money," said Alison Borland, an author of the study.

Heck, even if they saved regularly to a basic interest-bearing bank account or even stuffed money regularly into their mattress, they’d be better off than spending the money on beverages and jewelry.

Not surprisingly, the study states 90 percent of women were unsure about managing their finances.

There are, after all, no classes in offered, no cable networks, books, magazines, or newspapers that address personal finances, saving, and investing available to women, right?

Of course, many guys these days aren’t being smart about finances, either, including spending too much money on dates who earn their own money.

Overall, four out of five men and women aren't saving enough to keep up the same lifestyle after they stop working.

This is no surprise. People frequently spend more money than they need to.

Spend less money than you earn.

"Pay" yourself at least ten percent by diverting that portion of your income into savings and investments – IRAs, 401(k)s, etc., maxing out your employer’s match.

Save up for big purchases instead of financing (with the exception of a home) - do not buy anything with a credit card that you will not pay for before interest starts accruing.

Never use a "payday loan" unless your only alternative is borrowing from the mob.

Husbands: Discuss the finances and sound financial practices with your wife, who will likely outlive you. Fathers: Teach your daughter about money so she can be self-sufficient and choose to marry if the finds Mr. Right and won't feel compelled to marry or marry Mr. Wrong for the sake of his income. That will also make her less likely to vote socialist in hopes that Big Brother will take care of her.