In the past, I have advocated building a cash emergency fund. By “cash” I mean a liquid form of money which could be actual currency, but preferably would be savings in a high yield direct bank account. There has been some insightful commentary recently that has caused me to re-evaluate my position and add some justification to it. Of the many posts on the subject, two were my inspiration for this post. In the first one, Mike from four pillars discussed why a HELOC can be used instead of an emergency fund. In the second one, the money gardener explains why he doesn’t need an emergency fund.

In most cases, an emergency fund is really just a method to avoid debt. If a true emergency arose, which exhausted our cash reserves, most of us would just use credit cards, a home equity loan, or a P2P loan. All of those methods are nearly as liquid as cash and easily obtained, with a cost association in the form of interest.

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The Carnival of Everything Finance 15 was released today. My post, Financial Rules of Thumb Stink, was included in this event.

My favorites from the other entries were as follows:

Is “cheap” the new “green”? posted at Early Retirement Extreme
Living frugally doesn’t mean we should buy junk. I’ve noticed a lot of good material coming out of Early Retirement Extreme. The site is definitely worth a look.

6 Reasons to Live and Work in Rural America posted at Cubicle Dropout
I was glad to see telecommuting on this list

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A recent statement by US Treasury Secretary Henry Paulson has renewed the debate about the existence of the penny. In an interview, he said that the penny is worth less than any other currency and that he’d like to get rid of it. So today I’ll discuss the pros and cons of keeping the penny.

Supporters of the penny suggest that getting rid of it would mean higher prices, as retailers round up to the nearest nickel. Since it’s common for items to be sold for prices ending in .99, rounding to the nearest nickel would cause prices to go up (to the nearest dollar). This argument is countered with arguments that sales tax and multiple item purchases would reduce this effect. This only holds true if totals are rounded, not individual prices. The reason why retailers use .99 pricing is

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As part of his Motivation Monday series, David at MoneyNing spoke out against consistently taking sick days on Mondays and Fridays. His point was that using sick time to create an extended weekend won’t fool anyone, is irresponsible, and may even lead to losing your job.

I usually agree with a lot of the commentary at MoneyNing, but this is one area where we totally disagree. Taking full advantage of all of your time off is a subject that I’ve covered in the past. I wrote a 2 post series on this subject for the Lending Club blog. Here are those posts: Raising Your Hourly Wage and Lack of Vacation

As I said in my Raising Your Hourly Wage post, “I’m not suggesting that you exploit your sick and personal time but rather take full advantage of it when the need arises.” Being sick (or even just tired) is highly subjective. If the weekends wear you out and you need time on Monday to recover or if you

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