You might think that after everything I say here that keeping money in a bank account would be the last thing I’d recommend. After all – bank accounts typically can’t even keep up with inflation and that’s when they do offer you interest at all. But I’ve got to tell you – I do keep some money in a bank account and as dumb as it may sound at first, so should you.

It’s Not an Investment

Okay, let’s get this out of the way: Don’t think of a bank account as a place to make money. It’s not. Bank accounts, even ones from credit unions, where the fees are lower are never going to be a good investment. That’s not what they’re for. Bank accounts are all about liquid funds.

Sh*t Happens

It’s true – cars break down, people get sick, stranded, arrested. Heck, last week I rushed out at 10PM to an animal hospital because my dog was sick and I plunked down two hundred bucks only to be told that if it happens again (she kind of coughed and then couldn’t stand, and then peed herself), bring her back. Thanks a lot. Needless to say, I need to find a different animal hospital.

That said, I was glad to have money in the bank that I could use to cover the emergency exam. If I didn’t keep some money in a bank account, I’d have had to pay with a credit card or worse, borrow from a friend (and I’ll tell you – even in the City That Never Sleeps, friends don’t like calls at 10 at night asking to loan you a few hundred bucks).

You Can Lose Your Job

For those of you still in the rat race, having some money available in liquid form is vital. Let’s face it – rent is expensive, food is expensive and searching for a new job costs a ton of money. Never mind if you decide that now is the time to build your own business and you need to find a way to fund it. Having some money in liquid form means that you’re set.

And Yeah, Sometimes a Deal Comes Up

I’ll admit it – I’m a total metrosexual. I love wearing nice clothes by designer labels. I just hate having to pay full price for them. That’s why I was so excited last week when two things coincided at once.

One of my favorite sellers on eBay had a sale on Brioni shirts (and if you don’t know who that is then stop shopping at Old Navy and learn what quality clothing is all about). At the same time, eBay sent me a deal offering 16% eBay bucks for any purchases I made in the fashion section.

I picked up two beautiful shirts which ordinarily cost a couple hundred dollars each for half price and got the eBay bucks as well meaning that I can go back and buy something else later on (okay, so it’s only $30 but hey, I can get myself some nice socks with that money and it’s free).

Bottom Line, you definitely don’t want to keep all your money in a bank account but you do need to keep something available for emergencies and when opportunity knocks.

So How Much Do I Need?

I keep enough in the bank to keep me going for six months if need be. I also keep a small amount of cash on hand just because you never know what can happen – if there’s a power outage and ATMs don’t work, you need a few bucks available to get you through until the power is restored.

However, I know that six months’ worth of expenses is hard. So I recommend starting with putting away around $500-$1,000. That’s enough for most of life’s minor emergencies (like when my dog was sick). Ultimately, how much you’ll need to put away will depend on your own situation and how much you can afford but I recommend starting now, even if it’s just a few dollars here and there.

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