#19: Warranty worry

I'm a big believer in having an emergency fund that will cover my expenses for at least three months. I don't want too much cash sitting around doing nothing, but I also want to avoid cashing out investments to cover emergencies.

My emergency fund creates an interesting dynamic in my personal finances. Because I have cash available, I think differently about warranties and insurance products. My 2008 Huyndai Atos, for example, is currently insured for R25 000. I have that amount available in cash. At what point does it become uneconomical to pay insurance? If something happens to my car, having access to the additional R25 000 probably wouldn't hurt. Would it be better and would I be able to save that much before I need it?

Quinton Hoffman is facing a similar problem. He sent us this question:

Should I bother with extended warranties and service plans or should I use a emergency savings account? Which method gives me better value?

In this episode of The Fat Wallet Show, Simon and I talk about how to work out when a financial protection product becomes unviable.

Home calculator

The calculator I mention in the podcast can be found on rollingalpha.com. It's a great toy!

I've been memed! Our friend Stealthy Wealth was on point with this one.

At a recent @JustOneLap podcast... pic.twitter.com/mv32ubuQb7

 

Prepaid and contract

Ourmoney.co.za wrote a great article about finding the most economical airtime solution. Check it out here.

Shoes!

My irresponsible behaviour inspired The Disruptors to write an article about shoes. I'm flattered and honoured. Speaking of disruptors: I get so many emails from guys, but I hardly ever hear from women. Where my girls at? Drop me your questions at [email protected].