Emergency Fund

IT'S A GOOD idea to have an "emergency" fund to cover expenses during unemployment or disability, or to pay large unexpected bills, such as repair and medical.Families should have an emergency fund before they invest so that it doesn't become necessary to sell stocks to cover the emergencies.To decide where to put those funds, figure out how much money you'll need. According to the Institute of Certified Financial Planners, most advisers suggest three to six months' take-home pay.Three months seems enough if your job is secure, or if you have other income such as Social Security, stock dividends, etc. You should save more if your income fluctuates due to commission, seasonal income changes or job instability.

The United Way is announcing plans today to raise a $1 million emergency fund to help charities meet a steadily rising need for food, housing and utility assistance across the Baltimore area. Even as the skidding economy affects more Marylanders, a drop in donations has strained the ability of service providers, creating dangerous gaps in the depths of winter. "The demand for their services is going up, up, up, and the resources they have to draw on are going down, down, down," said Mark Furst, chief operating officer of the United Way of Central Maryland.

Among the multitude of ideas that readers have submitted for building an emergency fund, here's an intriguing one: Use a portion of your Roth individual retirement account. Although I have misgivings about it, the concept is worth a look. "My wife and I have an emergency fund equal to three-fifths my annual salary," said Robert Jones, a reader from Pennsylvania. "We keep it in a bond mutual fund as part of our regular brokerage account. We also have Roth IRAs with the same broker. "Might we be better off keeping that emergency fund as part of our Roth IRAs?

Mix holiday bustle with a lower stock market, rampant layoffs and nationwide recession and you have a recipe for widespread anxiety. But when it comes to money, some consumers are feeling far less stress than others. Who are these financially calm people? They are people who control their money rather than allowing money to control them. A new survey shows people who follow three basic rules of money management are less stressed. The rules should sound familiar. They are: have a cash emergency fund, pay off credit cards in full and use a household budget.

From the time she was a little girl, Dorian Rehfield understood the importance of saving money. She has always made sure to set aside enough funds to cover a year's expenses just in case of an emergency. She just never thought she'd actually need to tap into that account, as she is doing now. Rehfield, 42, lost her job as director of marketing services when her Glen Cove, N.Y., company shut down in August. So she's now forced to live off her savings and unemployment, which is paying her about 14 percent of her salary, until it runs out in about three months.

The United Way is announcing plans today to raise a $1 million emergency fund to help charities meet a steadily rising need for food, housing and utility assistance across the Baltimore area. Even as the skidding economy affects more Marylanders, a drop in donations has strained the ability of service providers, creating dangerous gaps in the depths of winter. "The demand for their services is going up, up, up, and the resources they have to draw on are going down, down, down," said Mark Furst, chief operating officer of the United Way of Central Maryland.

The General Assembly has taken a baby step toward bringing Maryland in line with a handful of other East Coast states that have passed legislation to subsidize their beleaguered dairy farmers. State lawmakers have given preliminary approval to the creation of the Maryland Dairy Farmer Emergency Trust Fund, but with one giant drawback -- the bill lacks funding. The trust fund bill was designed to create a $15 million pot of money that the state agriculture secretary could distribute to dairy farmers when milk prices fell below the farmers' cost of production.

In hopes of addressing the decline of the dairy farming industry in Maryland, lawmakers plan to propose legislation in the coming session of the General Assembly aimed at bringing relief to beleaguered farmers. One measure under consideration would create a Maryland Dairy Emergency Fund, similar to those adopted in other East Coast states that have confronted difficulties with their dairy industries. The fund would subsidize the income of farmers during years of low milk prices. Such a fund was a primary recommendation of the Governor's Dairy Advisory Oversight Council.

In hopes of addressing the decline of the dairy farming industry in Maryland, lawmakers plan to propose legislation in the upcoming session of the General Assembly aimed at bringing relief to beleaguered farmers. One measure under consideration would create a Maryland Dairy Emergency Fund, similar to those adopted in other East Coast states that have confronted difficulties with their dairy industries. The fund would subsidize the income of farmers during years of low milk prices. Such a fund was a primary recommendation of the governor's Dairy Industry Advisory and Oversight Council.

"A Labor of Love," the annual fund-raiser for the Howard County AIDS Alliance Emergency Fund, will celebrate its 10th anniversary a week from tonight with a benefit concert performance of "Jesus Christ Superstar."The cast, which includes a number of Broadway and Hollywood actors -- many with local ties -- will be headed by Odenton-based Larry Friedman, who understudied and played the title role in the Ted Neeley international tour of this Andrew Lloyd Webber-Tim Rice musical. Michelle Rios, who plays Mary Magdalen, is a Marylander who made her Broadway debut in Paul Simon's "The Capeman" and is currently appearing in the Broadway revival of "The Sound of Music."

Americans are getting advice on pocketbook issues from many people these days, including financial planners, credit counselors, consumer advocates and representatives for financial literacy groups. Most of the advice is good and well-intentioned. But I fear the approach is misguided and potentially dangerous. Here is some of the most common advice we hear over and over: Get a handle on your spending by writing down every penny you spend over the next month. Then review where your money went and make conscious decisions on where to cut back if necessary.

The General Assembly has taken a baby step toward bringing Maryland in line with a handful of other East Coast states that have passed legislation to subsidize their beleaguered dairy farmers. State lawmakers have given preliminary approval to the creation of the Maryland Dairy Farmer Emergency Trust Fund, but with one giant drawback -- the bill lacks funding. The trust fund bill was designed to create a $15 million pot of money that the state agriculture secretary could distribute to dairy farmers when milk prices fell below the farmers' cost of production.

In hopes of addressing the decline of the dairy farming industry in Maryland, lawmakers plan to propose legislation in the upcoming session of the General Assembly aimed at bringing relief to beleaguered farmers. One measure under consideration would create a Maryland Dairy Emergency Fund, similar to those adopted in other East Coast states that have confronted difficulties with their dairy industries. The fund would subsidize the income of farmers during years of low milk prices. Such a fund was a primary recommendation of the governor's Dairy Industry Advisory and Oversight Council.

In hopes of addressing the decline of the dairy farming industry in Maryland, lawmakers plan to propose legislation in the coming session of the General Assembly aimed at bringing relief to beleaguered farmers. One measure under consideration would create a Maryland Dairy Emergency Fund, similar to those adopted in other East Coast states that have confronted difficulties with their dairy industries. The fund would subsidize the income of farmers during years of low milk prices. Such a fund was a primary recommendation of the Governor's Dairy Advisory Oversight Council.

In hopes of addressing the decline of the dairy farming industry in Maryland, lawmakers plan to propose legislation in the upcoming session of the General Assembly aimed at bringing relief to beleaguered farmers. One measure under consideration would create a Maryland Dairy Emergency Fund, similar to those adopted in other East Coast states that have confronted difficulties with their dairy industries. The fund would subsidize the income of farmers during years of low milk prices. Such a fund was a primary recommendation of the governor's Dairy Industry Advisory and Oversight Council.

Among the multitude of ideas that readers have submitted for building an emergency fund, here's an intriguing one: Use a portion of your Roth individual retirement account. Although I have misgivings about it, the concept is worth a look. "My wife and I have an emergency fund equal to three-fifths my annual salary," said Robert Jones, a reader from Pennsylvania. "We keep it in a bond mutual fund as part of our regular brokerage account. We also have Roth IRAs with the same broker. "Might we be better off keeping that emergency fund as part of our Roth IRAs?

Dr. Janet Neslen has a ready response to those who don't believe there's a health care crisis in the country.The county health officer might mention that 500,000 Marylanders don't have health insurance or that some elderly people have to choose between paying for medicine or buying food.But Dr. Neslen says one of the most striking examples of the inadequacy of the country's health care system is the health department's shrinking emergency-care fund.The fund was set up three years ago to provide medical care to uninsured Carroll residents in cases of pain or acute infection.

Just what you need - a few more New Year's resolutions. If you've already given up on the promise you made to get into shape, perhaps you can try to make your finances a little healthier. And if you are still at it on your workouts or weight-loss program, keep in mind that getting the basics right on your finances can be a lot like losing weight - the hardest part is getting started. When you put the financial fundamentals in place and feel more secure about taking care of yourself and your family, you should give yourself the positive reinforcement you need to keep on going.

As long as you keep sending great savings ideas I'll keep printing them. As part of its "America Saves" campaign, the Consumer Federation of America invited readers to submit tips for building an emergency fund (e-mail Nancy Register at nregisterconsumerfed.org and send me a copy). More than two months later, I'm still receiving a stream of letters and e-mail on the subject and savings in general. Here are just a few: "Saving money requires spending less than you make each month. Saving also demands discipline," said Donald Swegan of Sebring, Ohio.

For many people, the biggest spending event of the year is not holiday shopping, a vacation trip or back-to-school buying. It's the arrival of the tax refund and deciding what to do with it. A tax refund marks a fantastic once-a-year opportunity for most Americans to spend their money smarter. Granted, personal-finance gurus work themselves into a lather advising people that tax refunds are evil - that you're giving Uncle Sam an interest-free loan, and that you should rush to change your W-4 withholding form so it never happens again.