The polls that appear in the Get Rich Slowly sidebar are far from scientific, and a lot of the time they don’t yield anything interesting. But sometimes they turn out a curious piece of information.
At the end of April, the poll question asked, “How many months to do you have in your emergency fund?” This was the same question posed in mid-January. This poll also ran concurrently at Money Rates, a site with a much older readership than GRS. And what were the results? Let’s take a look. Here’s what you said in April:
| How many months do you have in your emergency fund? (May 3rd) | ||
|---|---|---|
| GRS | MR | |
| less than 3 months | 38% | 12% |
| 3-6 months | 26% | 14% |
| 7-12 months | 13% | 25% |
| more than 12 months | 14% | 36% |
| what’s an emergency fund? | 9% | 12% |
| 1724 total responses | ||
And here’s what you said in January:
| How many months do you have in your emergency fund? (Jan. 28th) | ||
|---|---|---|
| GRS | MR | |
| less than 3 months | 2% | 3% |
| 3-6 months | 17% | 14% |
| 7-12 months | 45% | 40% |
| more than 12 months | 23% | 19% |
| what’s an emergency fund? | 13% | 24% |
| 1270 total responses | ||
Now, I realize a poll like this isn’t scientific, and it’s difficult to draw any actual conclusions, but wow. Even without tight controls, it seems pretty clear that readers at both sites (but especially here) have seen their emergency fund dwindle over the past few months. (Actually, the older folks at Money Rates are divided; some of them have built savings recently.)
I know my own emergency fund suffered a setback recently. As I wrote last month, our sewer line needed some work. Taking your advice, we had multiple plumbers bid on a fix. They actually came in around the same price ($2500), so we went with the outfit we’ve been using to deal with our plumbing emergencies. To pay for the work, I tapped my emergency fund.
In the olden days (2007, for example), this would have caused me great stress. I didn’t have much in savings. In fact, I had less than $1,000. But since paying off my debt, I’ve been able to pad my emergency fund to over $10,000 — plus I have a whole bunch saved in other targeted accounts. Sure, this money is set aside for a trip to Europe and for an eventual new car, but if I needed to, I could use it to cope with a crisis.
Maybe it’s time to review some emergency-fund basics. If you’re new to the concept, follow these guidelines when setting up your rainy-day fund:
- Pick a bank. I’m a fan of local credit unions and community banks, but I also like high-yield savings accounts at online banks. (My emergency fund is at ING Direct, though there are plenty of other options.) It doesn’t matter where you save; the important thing is that you do save.
- Build a buffer. If you’re still in debt, it’s probably best not to stick a lot in savings. You should set aside $500 or $1000 to deal with annoying emergencies like a car that breaks down, but the rest of your money should be thrown at your debt.
- Resist temptation. When you have a big chunk of change sitting in the bank unused, it can be tempting to use it for other things. Maybe you want a new television to watch the World Cup. Or maybe you want to purchase a new grill for barbeque season. Don’t. Resist the urge. Use your emergency fund only for emergencies, otherwise you defeat the purpose.
- Save more. As your debt dwindles, and as you get better control of your finances, build your emergency fund. Many financial gurus recommend hoarding six months (or more) of expenses. I’m not sure there’s any one set figure that works best. Instead, I recommend picking a number that helps you sleep at night. For me, that number is $10,000. That seems like a lot of money to me, and if anything disastrous happened, it would help me and Kris survive for a long time.
And, of course, don’t forget to save for your other goals. Your emergency fund is important, but you also need to set money aside to pursue other dreams, such as your daughter’s wedding, that trip to Japan, or the boat you’ve always wanted. (As I’ve mentioned many times, I’m a fan of targeted savings accounts for this kind of planning.)
Having said all that, I’m dying to know: How much do you have set aside for emergencies? Has your rainy-day fund dwindled over the past year? Is it because of the economy? Do you feel scared because your savings is starting to shrink? How important to you is saving for an uncertain future?
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My spouse and I have killed our emergency fund to send me to grad school for a computer science degree without taking out more student loans.
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My car met a sudden and *untimely* demise–there went the emergency fund! (Thank goodness it was there, though…)
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@Dan (#97) and Jamison (#41)
Target savings accounts are tools that really work for some of us. I used to simply have a savings account with cash in it that was for everything from car insurance to new clothes to gifts. And whenever I needed new clothes or when Christmas came around I would wonder how much I could reasonably spend and still meet the other obligations of that money. Vacations never happened because they were always so far in the future and a lower priority than whatever is going on right NOW.
Now I have a separate emergency fund that I know will always be a baseline. Then I have my savings account that gets funded every paycheck. I went down my budget and added up my irregular expenses and got $800, so that’s automatically transferred in, it took less than five minutes. It took me a little longer to make a spreadsheet for the balance of each category (maybe 30 minutes to make it nice). Now I spend about 10 minutes a month on it, adding in money when I get paid, subtracting when I have an expense.
I honestly spent a lot more time on the ‘simpler’ method. I would sit down every time I needed new clothes or bought a gift: My car insurance is due in two months, and we’re going to need propane and right now we need about three hundred gallons…it was a headache and I would often forget SOMETHING and wind up scrambling, or I would add a buffer and be unreasonably cheap. I also never knew how much I was spending on things. Is $100 per month too much/not enough/just right for new clothes? My spreadsheet both tells me how much I have to spend, and is a record of how much I’ve spent in the past.
I have a lot more control now, and I save time. When money is tight who wants to think about buying a pair of jeans and the prospect of having to attend an unexpected funeral coming from the same money? I figure this method may outlive its usefulness if/when I have the resources to pay cash for a new car AND take a vacation AND pay my car insurance and propane bills and not worry about the balance of my account. But right now I don’t, and I don’t want to put off buying a car because I’ve spent more on clothes than I should have, or be cheap with birthday gifts because I’m eventually going to need a new car.
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@ Dan, #98:
I use SmartyPig because it has a decent rate (2.15% apy) right now and it’s very easy to separate the savings account into different ‘sub-accounts’ or categories. I also use ING ‘sub-accounts’.
The reason I choose to save this way is that I can see how we’re progressing each month toward each individual goal; i.e. we are saving $1500 by Dec.1 for Christmas; we’re saving $8000 by Aug. 1 for my daughter’s HS tuition; and for her bus transportation I will need $1750 by 8/30 (and there are many more ‘goals’ for this savings account, like prop. taxes…too many!).
This way I and DH can easily watch the balances automatically grow from paycheck to paycheck and it’s very satisfying when the goal is finally met. This keeps us ‘honest’ about whether or not we can spend on a vacation and it helps us budget since my DH’s salary can vary by as much as $1400 ea. month.
Yeah, it would be great to just sweep an amt. into an account and call it a day. That was what we used to do, but our lives have gotten very complicated these days (w/kids that are involved in lots of camps, private school, sports, etc.).
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My Emergency Fund has dwindled over the past year, I had about 15 months of living expenses at the peak. I had a large amount of CC debt that I paid off with the fund. Now I have about 6 months living expenses in my fund, and my credit card debt will be paid off this month. I plan on rebuilding it to its former glory, and getting a reliable used car soon. Thanks GRS, for the great tips every day.
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I only started my e-fund in December and it still has less than 3mos of expenses in it (less than 2 really) though it should be there by the end of the year. Ultimately I would like to have 6mos in it, and more is better. We have a small car fund, started when our last car was totalled and the replacement cost less than the settlement, and a highly fluid general savings fund which I’ve been using for travel, taxes, and home maintenance. That account is pretty tiny right now, but I hope to get it back on its feet in the next few months.
Personally I classify really big sudden expenses as emergencies: roof leak, furnace death, etc. My reasoning is that I have trouble contributing to multiple targeted accounts at once; I’m already contributing to 3 plus retirement, and more would just be too distracting. I just put the max I can in the e-fund and hope things will hold out until it’s in good shape.
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I am lucky enough to have a federal job, so paychecks are steady. All debt (including $80K in student loans) is paid off..I keep $5000 in an ING savings account for emergencies and build it up to $10 K slowly…then sweep the additional $5K into our Smarty Pig account where we are saving for a house downpayment (am also lucky enough to live in USG-paid for housing…). This method has helped us save just over $20K in 11 months for the house, keep the $5K emergency fund topped up and max out our Roth IRA and 401K contributions for the year…
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We have an HSA with about $19,000 in it (enough to cover more than three years of our health insurance deductible if something awful were to happen). As far as other emergencies go, we have about $2000 in an ING account, and $5000 in a muni-bond fund in a taxable account at Vanguard. We’re adding $500/month to that account, so it’s growing pretty well these days. The $7000 would be enough for about three months of expenses, but we’d like to continue growing it to a point where we have 9 – 12 months of expenses set aside. Got a ways to go…
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I think it is intersting to hear from so many people as to what an emergency is to them, and how they would manage it.
We have our emergency fund of about $25,000 which is divided into ING savings and ING CD ladder. Our goal is to increase the E/R fund to $32,000. We also have a bunch of other targeted accounts at ING for escrow payments (we escrow our taxes and insurance ourselves rather than give the bank an interest free loan) for our multiple properties, house account (for repairs/projects), travel/vacation, fun (yes, fun!), holiday and gifts, etc.
Once you have all the accounts set up it is very easy to manage because I have one auto payment that goes from our joint account (each pay period) to my main ING account and then auto transfers from the main ING account to the sub accounts. I like having separate accounts because it helps me focus on certain goals.
And my ING emergency account is labeled vacation home which makes me less likely to tap it because in addition to be a savings account for an emergency it is also my seed account for our vacation home.
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I was laid off from an automotive engineering job last year. Took 9 months to find work. I had an emergency fund, but it’s gone now.
That emergency fund came in handy. Everyone should have one. Here’s hoping I can have it rebuilt in time for the next emergency.
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At the beginning of this year, my husband and I had four full months of emergency fund. Halfway through January, I had emergency surgery to remove my appendix. Thankfully, we have health insurance. By the end of April, when all the bills were in and accounted for, we had drained one month’s worth of fund (which is $4,000 for basic living expenses for our family of four – we live in San Francisco) to pay all of my out of pocket costs.
I am so grateful that (a) we have insurance! and (b) that we had that money to fall back on. The surgery and recovery were stressful enough without having to worry about how we would pay for it.
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The responses are all over the board here. We have about 2 months worth in savings. We have been hit hard the past couple of years and have had to scrape by many months just to avoid tapping into our EF. We do everything we can not to use it, because it is so hard for us to replenish it once it is used.
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I never really understood the concept of a dedicated 6-12 month emergency fund. I have 10K in an easily accessible account (with a reasonable rate) for situations when I need cash NOW (and I do mean *cash*, not “I suddenly need to replace something expensive” type situations – those are what CCs are for, to give you a few weeks to get the money together with a minimum of impact).
In case of long-term unemployment (or whatever other hardships) my expenses would come out of my more liquid investments and would obviously be accompanied by major changes in the overall strategy.
I really don’t see the benefit of having a huge hunk of cash just sitting there.
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My emergency fund was totally decimated in the past year because I was hit with two condo assessment fees totalling $15,000 within 12 months. So all I’m left with is a stash of a few gold coins which are my last-ditch “emergency fund” – probably $3,000-$4,000 worth. My current goal is to get back to a $15,000 emergency fund which will take me approximately 2 years, and eventually a $50,000 fund which will cover house repairs/condo assessments, possible unemployment, and misc. unforseen emergencies (as a Canadian I don’t have health care worries, and I don’t own a car since my city has excellent public transportation).
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Like Dan (#98), I just have “savings” (emergency + no-risk retirement/kids’ college fund + anything else) and “checking” (which only contains enough to last through my budgeted monthly expenses). I don’t see any reason to chop up my savings into little pieces.
I think the “separate savings account for every want” approach is likely to lead to an idiotic situation where you use your “vacation” fund to go on cruise just because you labeled it thusly, even though you just lost your job or the furnace died or some other non-optional expense happens.
I prefer to just know how much “extra” money I have, and leave it at that. It’s my retirement, my kids’ college fund, and my e-fund. ALL of it is money I can’t afford to spend unless I have to.
Makes me not spend it–that’s way better. Seriously, I make 6 figs and have no dept except a 50K mortage. And I really think a Carribean vacation is something I can’t afford. Retirement and college costs come first–I really think
it’s stupid to spend it on something optional before I have those covered!
So, in sum, I have over 100K in an “emergency fund” (aside from retirement accounts) and it’s not enough. 30K is accessible within a week (in an insurance side fund earning a guaranteed 4%) so maybe that’s my real e-fund? That would keep me and the kids going for a year or so.
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I’m at somewhere between 1-3 years.
I keep 3 months socked away in a MMF, with small weekly deposits. Every few months, I shave the overage and put it in a taxable index fund. It was a gut wrenching plan when I started- if it had been 2008 I NEVER would have stuck with it- but now even when stocks are getting killed, I’ve got a decent backup to the “real” EF. And hey, best case scenario, maybe I can convert it to an early retirement fund!
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When I was <30, my e-fund consisted of only $3000. Which I only had because it came as a lump sum income tax refund after I mistakenly payed taxes on 5 years of my grad school stipend of 10K/yr (in those days a stipend wasn’t taxable).
My e-fund came in handy when I had to get divorced, buy a car, and move across the country to a postdoctoral fellowship, all within about 9 months.
After that I tried to keep about $5k in my e-fund. It went towards the down payment on the house I bought with my 2nd husband and we didn’t have an e-fund at all for about 10 years after that because he would find something he “needed” pretty much all of the time.
I funded divorce #2 on CCs and then I finally saw the light. I paid down the cards and started saving like crazy. Now I wouldn’t feel comfortable without at least $30K in the bank, “just in case”. But of course I have 2 kids and that makes you want a little more cushion!
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Our emergency fund currently has $60,000 in it and we continue to add to it at a rate of $250/month. It is divided into a series of laddered CD’s and then a money fund. All of this currently pays a rate of about 1.75% annually. As long as our cash flow continues, and the economy tends to get worse, our plan is to continue to add to this fund, knowing that we have options and some level of comfort if we either my my wife or I would become unemployed.
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Wow, I read the first 40 or so comments and I’m astonished that there doesn’t seem to be anyone whose emergency fund has been affected by unemployment. Ours certainly has been.
My husband was laid off in May 2009 about the same time that national unemployment figures skyrocketed. He spent 3 months looking for work with nothing to show for it and then decided to start his own practice (he’s an attorney). Figured it would be easier to find clients than a new job.
And it was, but starting a business costs money before you start making money. So we burned right through our emergency fund (and thank God we had it). Two months ago he found a position with a firm in a small town and we finally have a steady income again. But the new job required a move and we’ll be lucky if we can sell our old house for what we still owe on the mortgage. So we’re not out of the woods yet. But we sure are glad we had an emergency fund.
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I am really curious about the data in your poll. With well over 1,000 responses in each poll, the results are clearly statistically significant. Something other than mere chance is driving the difference in responses.
During the time period in question (January 28 to May 3) the stock market rose substantially and the economic news was generally positive. One theory might be that the answers of January 28 reflected a generally pessamistic outlook on the part of your readers, leading them to think they needed an unusually large emergency fund.
By May 3, that pessimism had perhaps subsided, and they no longer anticipated needing such large emergency funds, and had repurposed those funds towards some other objective.
That’s just a theory. I think it’s plausible but not convincing enough to explain the magnitude of the difference in results. I’m curious about the blog posts that ran along with the survey. J.D., do you recall what posts ran when the surveys were taken? Were the surveys up for more than one day? It’s conceivable that, if people had just read a post about the importance of having a large emergency fund when they filled out the survey on Jan 28, it might have biased their responses.
Again, it’s a stretch, but the data sure is curious. Anyone else have any guesses what’s behind it?
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@Doug Warshauer (#119)
A poll can’t be statistically significant.. I think you’re confusing terms. You’re right that the poll has a “large N” or a large sample, but because the poll doesn’t track individuals over time, J.D. is making a big mistake by drawing ANY inferences at all from these. The polls are completely meaningless.
Each category has a percentage of the total number of people who participated in the poll. It’s possible that, contrary to the original post, people’s emergency funds have INCREASED because they’re moving from the low category (less than three months) to a higher category. With his poll, there’s no way to track movement from category to category over time.
*edited to fix some pronouns.
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Ihave 12 months living expenses in my EF. I also have a separate account with $10,000 for house emergency and separate money for taxes. I do have debt though in a car loan and a mortgage. I am single and if I lose my job, without an EF, I could lose my house. My mother, who has lived through the depression and I believe to be a wise woman, advised me to save that money that I was prepaying on my mortgage until I have enough to pay it off. Her comment to me was if I lose my job and need that money, the bank will not give it back to me. Better to have it in case I need it and then when I have enough, pay it off. Meanwhile, once I am at a comfortable level, I will do the same with my car loan. I have a 5 year loan which I have paid one year on and I hope to have it paid off in another 2 years at the latest. I am starting to add extra money. Unfortunately, I work in a service industry and the economy has affected my income and I am back to what I earned 13 year ago but everything else keeps going up but my income. Therefore, I will hold onto my money until I have enough to pay off the mortgage in full. Another thing about my house is that I bought at the height of the market and I don’t know how long I will stay here. If I sold tomorrow, I would lose money. I’d rather have the extra money with me instead of losing it in a property deal. Does this make sense to anyone besides me?
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@eyeots (#121)
Polls typically don’t track the same individuals over time. The polls that most of us are most familiar with, political polls, do exactly what these polls do: ask the same question to a sampling of people on different dates. The purpose of the poll is to draw conclusions about changes in the population as a whole, not the specific people who answer the poll. If the participants in the poll are randomly selected (as they are in political polls, but not in these polls), and there are enough participants, the poll results do provide useful information regarding the population as a whole.
Given the number of respondents to theses polls and the magnitude of the difference in the results, there is no doubt that the difference between the results of the two polls is statistically significant to a very high degree.
However, the fact that the difference between the results is statistically significant doesn’t tell us what caused the difference. It just tells us the difference was very unlikely to have resulted purely by chance.
It could have resulted from the respondents in May being different in some meaningful way from the respondents in January. This doesn’t strike me as a very plausible explanation, as the profile of GRS readers probably didn’t change much during that time span, and the mechanism of taking the poll was, I think, identical.
I’m not claiming to know what caused the change, but if we can’t come up with an explanation of why the results would have been biased, I am inclined to think they are telling us something meaningful.
Finally, I’m not sure I understand the point in your last paragraph that “people’s emergency funds having increased becuase they’re moving from the low category (less than three months) to the higher category.” In the January poll, only 2% of respondents were in the 0-3 month category. By May, the amount claiming to have an emergency fund of 0-3 months had grown to 38%, almost 20 times more.
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I disagree on the composition of the GRS groups not changing– the book publicity has been encouraging new viewers. That doesn’t explain differences in the unrelated MR site.
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We have just under one month of expenses saved in our E-fund. While this may sound comical to some, I must say it feels absolutely exhilarating because we have lived from check to check for far too long, the slightest demand on our money would be a great source of tension and stress.
After reading David Bach’s The Automatic Millionaire, I automated the deposits into the E-fund and try to send any budget surpluses that way. Saving is now reflexive as opposed to a second thought.
Also, we are in the period of zealous debt repayment. I have six figures in student loan debt and during the grace period we are devoting ourselves to paying off as much of our car as we can in the hopes that we can absorb the anticipated sizable loan payment without being stretched too thin.
I also love targeted accounts. They are an indispensable tool. Periodic but expected expenses now have funds devoted to them. Semi-annual auto insurance premiums used to drain us, now I either will have the entire amount saved or have to supplement very little from our regular cash flow.
I have to wholeheartedly disagree with Tyler (Poster #51), although my view is kind of speculative at this point. I enjoy sometimes reading a review of the basics to combat the perpetual consumerist attitudes in television advertisements and from family and friends. For me it’s a good refresher, and a reminder to stay the course.
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We have $30,0000.00. 10k and 12.5k in 2 ALLY BANK CD’s at 2.99% and 7500.00 in a MMA at 1.35%.
ALLY Bank has only a 2 month penalty with no minimum on their CD’S. So, We will use our MMA first, then break up CD’s if we have to.
ALLY BANK has great % and only a 2 month penalty, so I park emergency funds there.
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The key here is to resist temptation. An emergency fund is just that–for emergencies
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We had a good savings buffer until our new (and only) home got finished. We had to do a lot of renovations which was really needed that time. Our savings are really drained right now but we’re currently in the process of rebuilding it.
I guess we did not prepare enough for this event and overlooked the small things like transportation having to go here and there to supervise and fix some things.
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Our savings has not dwindled but it also has not grown any either. As with many I lost my job last April and the replacement I found in Sept payed about 1/2 what I was making and is significantly farther from home. My husband has had his salary cut and I know from friends we are not alone. Had anything happened to the house this year we would have had it shrink with no way to make it up. I know we are not alone.
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I’m European, I live in Portugal, so our average salaries are much lower than those in the US, but on the other hand housing is much cheaper than yours.
My husband and I have €16000 put aside in savings, roughly $19300, which could put us through 13 or 14 months of recurring expenses.
I do feel guilty for spending money, saving has become so addictive, but seeing the bigger picture, we have a positive net worth of roughly €74000 (if we were to sell our house, we would get double the value of our mortgage) at ages 28 and 30, so not bad at all. I have to let myself go of all the pressure I have created in our financial lives and live without looking at my home banking account everyday.
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I just wanted to second what @Rosa said about @Dan’s comment. I used to be in his camp with why have all the different segragations…Well it’s just because of what Rosa said, if it’s all coming from that one pool then there’s no way to know if you’re protected from emergencies and if you’ve got the savings to do or buy this or that.
We’re sitting about only about 1 month in our emergency and I’ve been getting back into the habit of reading here and other PF blogs. I’m hoping this can get me back on track.
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Wow, I’m totally impressed/depressed by all these folks with $10k-$100k in savings. Here I was so tickled to have almost $2500! My goal is $12k but it’ll take me a few years to get there – I’m not putting my life on hold, travelling this year for a wedding, a 50th b-day party, and to see my grandmother who’s 87 and I haven’t visited in 3 yrs. Fortunately our jobs are reasonably secure and our families well off; otherwise, a real disaster would really be a disaster.
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#128, Tia:
I am sorry to hear about all of those who have been unemployed and forced to use up all of their reserves…
I know for us, DH lost all overtime which, although we tried not to use it for daily living (went to retirement accounts), the timing was bad! Our oldest had just been accepted into a private HS (a little beyond our reach, but we rec’d $7400 in fin. aid and merit awards which all of a sudden made it a possibility) so the extra $ was a way to fill any gaps. He is still hoping to get that back.
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I had around $9K in savings in early 2009. Paid cash for a very small wedding in March ’09, then paid $2000 for green card application for my husband. Got laid off three months later, and my unemployment benefits just ran out in the first week of June of 2010. I built back up to about $8K before the benefits ran out, but this will cover us for only about 10 more months, then we’re toast.
If we don’t find work by the end of December, USCIS will likely deport my husband and I likely won’t be able to go with him. People suggest finding co-sponsors, but no one else among my family or friends is in the position to do so. Everyone else seems to be struggling, too.
I am glad I saved as much as I did, it will buy us a few more months before it all hits the fan.
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The zero-dollar emergency fund lady does have this important point – everyone’s needs are going to be different, and that flexibility is key.
My family has a $10K emergency fund. The rationale here is that it is enough to pay for a modest funeral, should the need arise, and probably enough for some travel expenses for an emergency event, too. This money does not get touched, for any reason.
We have a house-emergency fund of $5K. We own a 100 year old house, and repairs can be expensive based on locale, and the age of our house. I guess that this could also be used to hold off a few mortgage payments, too.
We have cut our expenses down to the point where we can manage most $1K or less emergencies out of the month’s budget – this just means that we delay planned but not urgent expenses or skip a contribution to a goal-oriented savings account.
For the truly catastrophic emergencies, we have structured our investments to ensure that some are flexible for withdrawal in the face of some dire catastrophe. (i.e. not tax-sheltered) Yes, this makes some of our money grow more slowly, but that is the trade-off for flexibility.
But, our life circumstances are also important. My husband has already qualified for his defined-benefit pension. And we are well-insured against his passing.
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There are so many purposes for savings sometimes it’s hard to prioritize. I wanted to have more in an emergency fund but also wanted more retirement savings – but couldn’t afford both. I split the difference by having a minor emergency fund in an online savings account – we try to keep $5000 in it, and each year I fully fund a Roth for myself and my husband for our major emergency fund. I can withdraw my Roth contributions at any time without penalty or tax to use as I might need.
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The EF for my family has dwindled due to a layoff and due to increased medical expenses.
The health insurance through my job is terrible now – co-pays, covered procedures, deductibles, co-insurance have all gone up to the point it feels like we have catastrophic only coverage. Over 25% of the monthly bills are medical pymts now leaving nothing to restock the EF and hardly anything to deal with emergencies as they arise. It’ll take 2-3 yrs to pay off as long as none of the kids have another ER or doctor visit – that includes check ups.
I’d like to have 20k in the EF. Usually it’s around 10k.
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I guess I do things differently than most people, as I don’t have a dedicated “emergency fund” or targeted savings accounts. I just have one big pool of savings. It amounts to enough to cover my living expenses for about 2 years (although if I were to lose my job and employer-subsidized health insurance, my living expenses would increase). About 1/3 of it is in investments that could lose money, so I suppose that’s the long-term portion of my savings. I have no concrete plans for expenditures that would dip into my savings by more than a month’s worth of living expenses, so I don’t feel the need to distinguish my emergency savings from my general savings.
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@Brenton (#53): Actually, you’re both wrong. JD used the correct pronoun, but in a compound object, “me” should be last. It should say, “…it would help Kris and me survive for a long time.” If you’re going to correct someone’s grammar, at least make sure you’re right!
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Right now we have $62,000 of an emergency fund, which is over 10 months of expenses. We’ve been saving for 5 years and have no debt beyond a mortgage and student loan.
It was so, so great to have the security of that money there when I decided to quit my job two months ago because I hated it so much. I was actually looking forward to being off for a while, and that safety net made me feel really secure. Weirdly enough, it only took me a week and a half to find another job, so we didn’t end up using the emergency fund at all, but I’m really glad we have it.
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We don’t really have a designated ‘Emergency Fund’ since we just have ‘savings’. I’ve got about £20,000 cash and my GF probably has about £120,000 in cash, with more to come once we complete on our house sale (about £600,000 to come) and pay off the bridging mortgage (we owe about £200,000). That should be enough to cover any emergency.
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