I understand that a lot of personal finance experts suggest having an emergency fund. Personally, I never worried much about it for a few reasons.

First, I’ve always been pretty sensible with my finances. I save a lot, and if I ever faced an emergency, I could simply stop saving for a while and use that money. But this has changed now that I don’t have a steady paycheck, and some months my income is quite low.

Also, I’m quite disorganized. I never had separate accounts for different purposes, like holidays or car maintenance. All my savings were in one place, and I would dip into them whenever needed. This system worked for me because I was good with money.

Another reason is that I can’t stand having a large amount of money just sitting there earning a mere 1% interest per year! I feel like I’m missing out by not investing it to earn higher returns. Whenever I have more than $5,000 in my bank account, I start thinking about where I could invest it for a better return.

I’ve been fortunate so far and never faced an emergency I couldn’t handle. If something did happen, I could rely on my mom’s support for a few months and pay her back later. Alternatively, I could use my credit card and pay interest for a couple of months, or take advantage of the credit card’s interest-free period. It wouldn’t make financial sense to use my 19.9% interest credit card for an emergency if I could just use cash I invested at an 8% return or pay off my 7% loan like I did last time.

For instance, in July, I received $5,000 from various income sources and couldn’t let it sit in my account for more than a week. So, I used it to pay part of my 7% loan. It felt great because I saved 10 months of repayments and about $500 in interest. So, if I have an emergency this month and end up paying $20 in credit card interest, I would still find it worthwhile. It’s definitely a risky approach and not for everyone.

I know this method isn’t ideal, but it has worked for me so far, mostly because I haven’t encountered any major emergencies. I don’t have a car or kids, my flat is only 3 years old, and I’m healthy. Also, knowing my mom has a substantial emergency fund gives me peace of mind. I would only ask her for money in a real, dire emergency. This allows me to take more risks with my money.

Would you be comfortable not having an emergency fund, or do you prefer the safety and peace of mind that comes with potentially lower returns?