Of course, it is true that any kinds of unexpected expenses would be spent from discretionary funds prior to being spent from back up funds, yet ti seems to me that we label emergency funds as emergency funds in order to try to categorize a kind of higher priority of alertness to know that if we are running out of funds to deal with various expenses and we are having to tap into emergency funds, then we may well be engaging in a certain level of irresponsibility and/or preparedness in regards to how much of the various back up funds that we are keeping on hand, since at any point we could have situations that come about that end up exhausting our various extra cash funds and even potentially deplete various cash funds and other funds that we have, and we may well consider that bitcoin is the very last place from which we are going to want to spend, and surely sometimes we could end up putting ourselves into a place where we have to use some of our bitcoin as emergency funds because we are running out of funds in other places.  We have to use our judgement in regards to which funds to spend from first and what might be the odds that we are able to replace those funds... .

Let's say that we had been investing in bitcoin for around 7.5 years (going by your forum registration date Ever-young), and we have been building up our back up funds and we feel that our cashflow management is in a pretty good place.  We are in a situation in which we tend to hold 3 months of expenses in cash that we consider emergency funds and then we tend to have another 2-6 weeks that we consider to be reserve funds, and the amount varies based on what kinds of things that we have going on in life and if we might be saving for one thing or another... Maybe we have some other investments that are not bitcoin that are right around 4-5 months of our expenses, and maybe our bitcoin holdings are around 7-8 months of our expenses... So we are feeling pretty good about where we are at. 

Let's say that usually we get paid every two weeks from our main income source, and we have some smaller income sources of side jobs that we have that maybe only constitute about 10% of the size of our overall income, yet there comes a time in which our employer (our main source of income) runs into some unexpected glitches in his payment systems or some other strange things happen with him, which we did not consider would happen.  We had been working for this particular employer for right around 10 years, and so we have faith that he will work things out with his ability to pay.  Accordingly, we keep working for our employer while  we are not getting paid, and at the same time, we have some kind of an incident with our car or maybe the roof of our house is damaged in a storm that our car was damaged at the same time, so then maybe we have insurance claims yet they are not paying until they are resolved, yet we need to have a functioning car so we have to go shopping.. and my point is that whether we call these things emergencies or not, we likely will be drawing down on various forms of our cash and perhaps at some point we might draw upon our emergency funds and maybe at another point we consider if we might get a temporary loan or maybe we will draw upon our bitcoin, maybe depending on our getting reimbursed and dates that various checks might be expected to arrive in our bank account.

My example might not be very great since it ended up fitting into kind of emergency circumstances, and the point that I was trying to make was that there could be somewhat norma circumstances that come up that affect your cashflows, and even if right before all of the things happened, there had been a dip in the BTC price, so that you used up most if not all of your reserve funds, and maybe if you were overly excited, maybe you dipped into more than 2 weeks of your emergency funds... so then you might be caught in a situation where you usually keep a lot of back up funds, but then all of a sudden, you don't have any extra money and some of your income sources dried up, but you still have certain expenses.. and maybe you can cut some expenses, but other expenses you might not be able to cut, and you might have had already incurred some of the expenses with an expectation that your paycheck was going to be coming in as expected. which it had always previously come in as expected for 10-ish years or more.

From my perspective, the idea of floating cash does not really give much if any extra money.  I tend to think about float as a kind of money that is within discretionary funds each month, but that money is held aside because some expenses have not become specifically known.. like maybe the utilities and the food charges and transportation costs vary, so a guy keeps enough to cover all of them in case they are high, yet once each of them become known, then any of the extra money that was in the floating cash would become part of discretionary funds... A person might have good and solid practices in regards to both figuring out the expenses and/or keeping extra float or maybe some folks are not very good at keeping a float, so they end up tapping into other funds because they failed/refuse to keep sufficient/adequate float funds in a responsible way.


I think you raise some good points Umulala-alala, since the management of cashflows can overlap into various categories of funds and surely I think about emergency funds as the last funds that you have left prior to having to dip into your bitcoin, and sure bitcoin could serve as emergency funds, yet hopefully many of us are learning that it is not a good practice to use bitcoin as an emergency fund, so part of the reason to be so anal about making sure that we have emergency funds and various other kinds of back up funds is so that if there end up being various situations in which the expenses exceed the income, then we have options in regards to which funds to use first and the fewer funds we have the fewer options that we have, so part of the reason that we label emergency funds in such a way does not exactly have to do with how or if they can be used, but is to signal a kind of level of problematic place that a person might be if the only funds that he has left happens to be emergency funds and/or bitcoin.

If he ONLY has those two kinds of funds to choose from (bitcoin and emergency funds), he may well recognize that he would likely feel that he is not in a very strong and/or comfortable place in regards to what options he has available (and perhaps he might have had contributed towards putting himself into such a place by not engaging in better cashflow management balances).. and surely the longer and longer that we are in bitcoin, the more that we should feel that we have a variety of options, and even if we continue to build our bitcoin (and our cashflow management systems/practices) and even if we have not gotten to our target bitcoin accumulation place, the longer and longer we are in bitcoin, the more that we have a variety of options that result in our being able to survive (and perhaps even thrive) through a variety of circumstances that others consider to have had been negative, yet we are able to have options and even financial and/or psychological cushions in our going through such negative financial and negative psychological circumstances.


Each of us are free to consider our balances, and whether we might be running too much risk, and yeah, we agree that the old friend situation is not an emergency, but we still could choose to use those funds, even if that is all that we have left, and sure if we end up using  some of the funds, then we might be treating those funds kind of as reserves.. but there can surely be some flexibility.

If we know that we are getting paid in 5 days and we don't have any money left, so then if we take $100 out to give (or loan) to our friend, we know that we are putting ourselves at risk for 5 days, and then we also cannot be 100% sure that we will be paid in 5 days, so we have higher level of assurance that we are getting paid in 5 days once that money comes into our account.. and at the same time, even when money goes into our account, sometimes banks screw up or even freeze funds or even lose money, so there could be problems with money that we think that we have, and yeah, maybe we keep one month of our emergency funds in physical cash. 

Another month in our bank account and perhaps another month in some exchange... so when push comes to shove our emergency funds are not all in the same place and there can be risks in regards to how we hold them, so we could even decide to keep an extra week in each of those three forms based on the risk that any one of the places that we are keeping our emergency funds could run into issues that contribute towards our having less than we thought that we had in the event that any of them were to experience some kind of an issue that blocked our abilities to get to the funds... for example, we have the physical cash in a safe but the house burns down, so the money in the safe got damaged, even though we thought that it was secure and protected.. it had issues in the way it was being held.. but maybe our money in the accounts were sill accessible so instead of having 3-4 months of emergency funds, after the fire, we ended up ONLY having 2.4 months of actual available funds.