[TinyFish]

Oh, and another thing. There is another aspect to an 'emergency fund'. While I think we all tend to think of more financial emergencies (you lose your job, have an illness, suddenly need to replace something like a car or a component of your house), there is another side.

What if there was a serious, dangerous emergency? For example, what if there was a natural disaster in your area? I remember reading about people from New Orleans who either a) got out, but then had no money to cover even a few days in a hotel in a safe area or b) couldn't get out at all because they had no money for transportation. Wouldn't you sleep better at night knowing that you had the money for a bus ticket out and for a safe place to stay and some decent meals? What if your apartment building burned down and you had to temporarily stay somewhere more expensive? Or you had to replace all your clothes because all you got out with was the jammies you were wearing?

I'd say you'd want at least a small emergency fund no matter what. 20K all or nothing? Well, almost nothing in life is all or nothing.
-TinyFish