Sharebuilder.Com - Using their free bonuses to build up an emergency fund

Similar to the cash vs. debit debate that was referenced in an earlier post, many in financial circles debate whether one should still contribute to an Emergency Fund when attempting to get out of credit card debt. While it is certainly a good idea to use any and all funds to pay off as much debt as possible, the criticality of having at least something in an emergency fund is even more important. If we are going to state definitively that we will “not use credit cards, no matter what”, then we have to be prepared if an emergency car repair is needed, or if something in the house breaks down. Without that nest egg in place, there will be choice but to turn back to the evil credit monster in those scenarios.

My solution to the emergency fund has been www.sharebuilder.com, which is a site owned by Ing Direct. I love Ing Direct, for many reasons, but most of all for the bonuses they sometimes offer when opening a new account. I first signed up for the sharebuilder site when they were offering an “Open an account, get a $50 bonus” promotion. When we refinanced our home a few months ago, we got some cash to pay off credit cards at closing time (yes, our debt problem was even worse then). I took $400 of this cash, and opened up a sharebuilder account. With the promotion, that total immediately jumped to $450. I split that amount pretty much down the middle and invested in “Ing Direct” (I told you, I love that company) and “GSV Capital Group” (A company that invests in twitter/facebook futures). It has only been a few months, but both of those stocks are performing well, and my account is already up to $504.62.

At the same time, I had set up an ingdirect.com savings account, and set up an auto-debit of $30 from each bi-weekly paycheck to help grow the emergency fund. In a couple of months, I had $120 in this savings account. It wasn’t long after this that I received an email with another promotion from sharebuilder that would offer a $75 bonus if I opened up a second sharebuilder investment account, and invested in an approved mutual fund. I took the $120 in the savings account and setup a second account, as instructed. Since Ing and Sharebuilder are linked, the transfers between accounts is instant, which is a nice plus. After the promotion was applied– my balance immediately jumped to $195 in this account. The current balance is up to $206.54.

At this time, our debt total remains the same.. Over $21,000

.. But our emergency fund continues to grow: $788.55

The best part is that $125 of that total came from bank bonuses!

E.F breakdown (fluctuates daily because of the nature of the stock market)

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Sharebuilder Account 1: $504.62

Sharebuilder Account 2: $206.54

Ing Savings Account: $77.39 (NOTE: The savings account earns 0.80% interest)

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Perhaps one day we will use the emergency fund to pay down debt.. Perhaps as the last payment to get it down to zero. But in the meantime, I think I will leave it be, and let it grow.. Just in case there is, ya know, an emergency.

I cannot guarantee that the sharebuilder promotions that I received are still available, but a little google-work should help you find out what they are currently offering.

Jefferson