Gold is selling at record highs and I’m seeing the following question asked more frequently: Should you use gold and/or silver as an emergency fund? I’m seeing this question asked on a variety of message boards that I frequent (even those that aren’t focused on personal finance) and of course I hear them on probably a weekly basis on Dave Ramsey’s podcasts.
Dave’s answer to this question is no.
My answer to this question is also no.
Now I’m not an expert, obviously – I’m the one blogging about getting out of a mountain of debt despite having a six figure income – but I don’t think that gold and silver will be worth their weight in the event of an emergency.
There are two types of emergencies that are typically discussed during these forum conversations on the topic. The first is your run of the mill emergency – an unexpected car repair, etc. In that case, hefting your gold bar into the bank and paying a fee to cash it out isn’t convenient nor is it wise. Cash is king in that case.
The other scenario discussed is in the event of a true and complete collapse of our economy. If you’re considering using gold or silver as your emergency fund, ask yourself this question “If the economy has collapsed and stores and businesses are closed, am I willing to give up a loaf of bread for a piece of silver?”
The answer to this question, at least to me, is obvious. Heck no. Why would I want a piece of silver? If I am giving up a loaf of bread I’d better be getting a gallon of clean drinking water or gasoline in return. In the event of an economic collapse (which I’m not worried about) we’ll return to a barter economy – goods and services being traded for goods and services. Not goods and services for a silver coin or a bar of gold.
What do you think? Are you using gold or silver as part of your emergency fund? If so, why? I’m honestly curious and I’d like to get some other opinions on the matter.
Photo: digitalmoneyworld/Flickr
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I think a silver dime would be easier to carry than a gallon of either liquid and I may be able to trade my loaf of bread for that and then use the dime for a pound of meat or some such scenario. It may have more value to me than your loaf of bread.
Good point, Dan. A handful of silver coins is definitely easier to carry than a gallon of liquid or even a gold bar.
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