It’s great to have friends and family to help you out in the case of an emergency. Not everyone has or would want to use those resources… and available credit can be an expensive proposition for some people, especially in an emergency with an undefined ending point.

If you have $10k invested at 5% instead of in the market at 8-10%, it’s a guaranteed opportunity cost of at least 3%. If you end up in an emergency and using available credit for that 10k, it’s at a cost of your home equity interest rate, or worse, a credit card interest rate.

There’s no one-size-fits-all solution. Personally, in an emergency, I can call on my cash, which will probably cover about 3 months or more if I reduce expenses.

If I need more, I can tap into my Roth IRA contributions, though I’d rather not. Credit cards and taking money from friends or family would be the last option on my list. It’s a personal choice.

I’ve never understood the point of an emergency account and I don’t maintain one.

In a true emergency I would call upon friends, family, employer, and available credit to help me out — not on some $10K-$20K that I’ve kept inefficiently invested forever.