Dear Dave, I like your idea of having an emergency fund. Currently, I have $17,000 in General Mills stock. Can I use this as my emergency fund? --Anonymous

Dear Anonymous,

No, no, no! Stocks are long-term investments. The one and only purpose of an emergency fund is to have cash on hand in the event of an emergency. It is not an investment, and it’s not designed to replace income. An emergency fund is there to cover unexpected expenses that result from life’s unexpected events. Wow, just think if you had used General Motors stock as your emergency fund. Your entire life would be one big emergency right now!

I don’t have a problem with General Mills, but if you want to call it an emergency fund, you need to cash out your $17,000 and park it in a good, easily accessible money market account with check-writing privileges. It’s absolutely essential that you keep your emergency fund liquid and easy to reach. You wouldn’t keep your umbrella locked in a safe in the trunk of your car, so why create a situation where it’s a pain to access the money in your emergency fund? --Dave