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 Post subject: where do you keep your EF?
PostPosted: Fri Apr 27, 2007 10:57 am 

Joined: Thu Apr 19, 2007 7:58 am
Posts: 231
in a shoebox, in a B&M bank, an OL bank, MM acct, MF ?

And how much do you keep in your EF. You could answer in dollar amt or whatever way you calculate it i.e. 1 months net salary, etc.

I'm thinking of making changes as to how I manage my EF and I'm interested in what people really do with theirs.


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PostPosted: Fri Apr 27, 2007 11:26 am 
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Location: Portland, Oregon
I have two emergency funds. One is the $5,000 joint account that I have with Kris (our only joint account), which we never touch. It's in a high-interest checking account with the company through which we have our mortgage. My personal emergency fund is in development. It's with my local credit union. I only have $700 there, though I'm hoping to bump that it in the next couple months. ($1000 would be fine for now.) I'd also like to transfer it to ING once I open that account -- the credit union pays less than 1%!

Long-term, once I have my debt paid off, I'll have a $5,000 personal emergency fund.


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PostPosted: Fri Apr 27, 2007 11:48 am 
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Location: Houston, TX
To tell the truth, I don't have a well-defined emergency fund. I have the equivalent of several months worth of expenses in my brokerage (stock) and checking accounts (interest-bearing cash) but it's not specifically earmarked as 'emergency use only.' Perhaps it's just semantics, as I'm the only one with access to it and I know that I can't (don't want to) spend it all. All of my accounts are online.

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PostPosted: Fri Apr 27, 2007 11:53 am 

Joined: Thu Apr 05, 2007 8:01 am
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The ironic things about emergency funds is that the better able you are to put funds in your emergency fund, the less you need it. The better you are off financially, the more banks and other financial institutions are willing to lend you.

The people who need emergency funds the most are those carrying large debt payments. If anything should happen to them (loss of health or job), they'll need some backup funds to keep making their payments. Those with few debts, a roof over their head that's fully paid for, and appropriate insurance only need to worry about the utilities and food.

squished


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PostPosted: Fri Apr 27, 2007 12:03 pm 
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jdroth wrote:
I have two emergency funds. One is the $5,000 joint account that I have with Kris (our only joint account), which we never touch. It's in a high-interest checking account with the company through which we have our mortgage. My personal emergency fund is in development. It's with my local credit union. I only have $700 there, though I'm hoping to bump that it in the next couple months. ($1000 would be fine for now.) I'd also like to transfer it to ING once I open that account -- the credit union pays less than 1%!

Long-term, once I have my debt paid off, I'll have a $5,000 personal emergency fund.


Why is it that you need a personal emergency fund in addition to a joint emergency fund? What's the distinction? Do you envision having emergencies that affect only you, and for which Kris will say "Sorry JD, the joint emergency fund is only for joint emergencies. Since we didn't *both* lose our jobs, you can't touch it."

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PostPosted: Fri Apr 27, 2007 1:44 pm 
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Location: New Jersey
We keep most of our emergency fund in a money market that is accessible with checks and an ATM card. The only exception is a small amount of actual cash in our “secret” hiding place at home. The cash is in case there is a major disaster or power outages that prevent the use of ATM or Visa.

The emergency fund could cover the basics for about six months if necessary. The cash is usually between $500 and $600 (sometimes we borrow from it if the ATM is out of service or one of us forgets to stop on the way home).


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 Post subject: How much to keep
PostPosted: Fri Apr 27, 2007 2:03 pm 

Joined: Sun Apr 15, 2007 2:03 pm
Posts: 6
I have read recommendations for 1000 dollars for an emergency fund if you are still in debt. Once out of debt they recommend having an emergency fund that covers six to eight months of living expenses (another plus of having a budget is you know how much that is). These recommendations sound safe to me. I would just make sure that you look into getting a better interest rate than what a typical brick and mortar bank give. I would also have to agree with squished18 on
Quote:
The people who need emergency funds the most are those carrying large debt payments. If anything should happen to them (loss of health or job), they'll need some backup funds to keep making their payments. Those with few debts, a roof over their head that's fully paid for, and appropriate insurance only need to worry about the utilities and food.


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PostPosted: Fri Apr 27, 2007 2:11 pm 
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Location: New Jersey
To me, an "emergency fund" means "cash I can get at immediately if I need it". As opposed to something that will take a few days and require me to transfer money. If for some reason I need cash, I can get it. This is important because I keep only enough money in my checking account to cover bills that are being paid; withdrawing $40 from checking would result in an overdraft.

I keep a savings account at my physical bank with around $2000 in it. The interest is negligible, but it's available from ATMs and the like.

I choose the amount based not on any math, but on comfort level. I feel okay about having $2000 cash available. I don't feel okay about less. There is no logic behind it.


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PostPosted: Fri Apr 27, 2007 4:38 pm 

Joined: Fri Apr 20, 2007 10:17 am
Posts: 25
Location: Minneapolis, MN
right now my emergency fund has a whopping $56 in it.. this is at ING savings. I just started it. Direct depositing 6% of my paychecks into it for now. Hoping to get to $1000 in the near future, but I'm focusing more on getting out of debt for the time being.


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PostPosted: Fri Apr 27, 2007 4:58 pm 

Joined: Sun Apr 15, 2007 1:31 pm
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I have $3000 in my combined fund of emergency money, saving-for-a-house-down-payment, and saving-for-a-new-car. In principle it might be a good idea to keep them separate; in practice, I don't like the hassle of dealing with more than one bank account. (I do keep it at EmigrantDirect so that it's earning some interest). So... since I want to save up a minimum of $15000 for a house down payment, I don't have a set account to put aside as an emergency fund. I'm just going to keep adding to it until I get to the point where I can say there's no way I'd need that much cash in the short term.

It doesn't bother me that it takes a couple days to do a bank transfer because I do use credit cards. So, if I have an emergency, I'll put it on my credit card and pay it off later from my emergency fund.


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PostPosted: Fri Apr 27, 2007 6:02 pm 
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Location: Portland, Oregon
Quote:
Why is it that you need a personal emergency fund in addition to a joint emergency fund? What's the distinction?


Good question, Nickel. This comes down to relationship politics. The joint emergency fund is, in Kris' eyes, for house emergencies only. If, for example, I got in a car accident, she would be reluctant to use that money. However, my personal emergency fund would be perfect. There are many things that I might consider an emergency on a personal level that Kris would not.


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PostPosted: Sat Apr 28, 2007 8:40 am 
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My emergency fund(s) exist as lines of credit. . .I don't like keeping cash too long. . .


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 Post subject: I just started mine!
PostPosted: Sat Apr 28, 2007 9:26 am 

Joined: Sun Apr 15, 2007 2:57 pm
Posts: 15
Location: Oakland, CA
I just opened an ING account for emergency savings (as well as the 25% I deduct from every check for self-employment tax.) Eventually, I plan to open a second ING savings account to separate the tax money from the emergency money.

I recently took on a second job specifically for debt reduction/savings and my first step was to fund my emergency fund up to $1000. This should happen in about 6 weeks!

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PostPosted: Sat Apr 28, 2007 10:34 am 
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jdroth wrote:
Quote:
Why is it that you need a personal emergency fund in addition to a joint emergency fund? What's the distinction?


Good question, Nickel. This comes down to relationship politics. The joint emergency fund is, in Kris' eyes, for house emergencies only. If, for example, I got in a car accident, she would be reluctant to use that money. However, my personal emergency fund would be perfect. There are many things that I might consider an emergency on a personal level that Kris would not.


Really? Do you need your car to get to work? If not, then I guess I could see this being a reasonable view. But if you need your car to make a living, then losing it is most definitely an emergency that affects both of you. I guess part of this has to do with my worldview, though. To me, married couples should be equal partners that share in each others ups and downs. In this case, it sounds like that's perhaps partially true, but with some major qualifications.

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PostPosted: Sat Apr 28, 2007 1:10 pm 
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Joined: Sun Apr 15, 2007 11:00 am
Posts: 28
Location: Washington, DC
I started building my emergency fund at ING Direct before they began to really lag behind the other online banks in interest rates. I have about 7-8 months of expenses sitting there at the moment, that I haven't wanted to move simply because I really like ING's customer service. Also, since it's "only" an emergency fund and I'm not actively building it up any more, I'm not worried about it increasing in value. I just want it to keep pace with inflation, which ING's rates should achieve.

My current cash savings are going into my Emigrant Direct account. I'm sort of torn at the moment between increasing my 403(b) contributions or building up more cash savings. Between my 403(b) and my IRA, I'm already contributing about 18% of my gross salary to retirement savings.


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