Do I have a Stealth Emergency Fund?

I used to believe that I didn’t have an emergency fund, and I’ve commented on other blog sites stating that I didn’t have one too.  But really I do, but most people would not consider it a traditional emergency fund.

I estimate that I have over $15,000 that can serve as an “stealth” emergency fund if the need arises!

So what is included in my stealth, Emergency Fund?

1. “Checking Account Buffer” – I keep $8,000 in my checking account as a buffer just in case I have a bad month in which I need to use more money than normal.  Usually, in December, my credit card bill is higher than normal and I dip a bit into this buffer to help pay off my credit card balance in full.  This amount would be used as my first line of defense against an emergency.
2. Contributions to my Roth IRA – In my previous post called: Roth IRA Contributions versus Roth Investment Gains, I explain how you can withdraw your contributions at any time, up to the total that you deposited into your Roth IRA.  So while not a desirable action to take, if a true emergency is experienced, that money is available.

Of course, there is money in my brokerage account too that can serve as a fallback to the emergency money that is identified above.  In fact, any amount that I have in cash in my brokerage account would be used before my Roth IRA.

So in conclusion, I don’t have a traditional Emergency Fund, but I have enough in other money pools that they can serve as a sort of “Stealth” Emergency Fund.

I’m very happy with my current financial portfolio, but do you think I should still create a formal Emergency Fund, and why?  After all, I’m willing to bet that my stealth emergency fund is more than 70% of the population’s normal emergency fund…

-MR