Emergency Fund

Erinm278 · December 2013

I know this is one of those topics that depends greatly in where you live and cost of living etc. but I thought I'd ask anyway. With all the talk of house plans and building we are trying to figure how much to put down on the new house and how much to save for emergencies. This would be separate from retirement, college funds, etc.

Anyone care to share what you do for emergency planning?

chiboo9 · December 2013

So funny you posted this. DH and I were just talking about starting an emergency fund after the new year. I think we decided on saving 6 months worth of income (after taxes). No rhyme or reason to it, aside from hoping that if one of us were to ever lose our job, we'd find something within 6 months.

jemasa33 · December 2013

My emergency fund is a credit card. Spare cash? What is that?

elyse05 · December 2013

3 months of bare minimum necessary expenses if both of you are working, 6 months if only 1 person is working. You can factor in your credit card as part of this fund too if you like, though some things can't always be paid with a CC (like mortgage/rent).

We are in the same boat- trying to save to build a house without dipping into the emergency fund. Seems impossible but I know it is smart. I wanted to buy some land now to hold onto until we can build, but it looks like we have to put that off a year or 2. Bummed. I'm hoping once we pay off our car it will be easier to save quickly! We just keep bumping into big expenses all the freaking time. It is so frustrating!

lancomechica · December 2013

I have about 3.5 months of my income in an emergency fund. I would have to check with husband to see what he has set up. We have been keeping funds separate but contribute equally.

Erinm278 · December 2013

@elyse05 we are in a similar boat. We have the money to buy the land now and start the build, but there are a lot of other factors. For one, we need to sell the house we currently own!

We're just trying to get a better idea of how much to put down and how much to save. We have already decided to wait another year at least before we break ground. We have a pretty aggressive savings goal for this year.

redhead610 · December 2013

Our emergency fund/savings is about 5-6 months expenses.

When buying a house you will want way more in savings, especially if you are buying new. Extra things like lighting fixtures, bathroom fixtures (often builder grade that comes with the price of the house may not be the style you want), paint, and window fixtures add up quickly.

lancomechica · December 2013

Yeah...we have no credit card debt either but student loans are a biatch!

kaylakim · December 2013

We have an emergency fund set up with several months worth of living expenses. We use ING (now Capital One) and have different sub accounts set up. We have a regular savings, vacation, car expense account. The cool thing is you can set up as many accounts as you want and have all of them auto deposited from your regular checking or savings. It's awesome!

Erinm278 · December 2013

At this point we have no credit card debt, no student loan debt, and only one car payment. We have medical bills from having Ellie and should have them paid off in the next couple months. I'm just nervous about taking the plunge with the house until we have more money saved.

redhead610 · December 2013

lizabethann06 said:

mystererae said:
I've burned through some of my emergency fund being off work for so long due to the pregnancy/maternity leave -- since around December 2012 and only just now going back part-time -- but my usual goal is 2 months' pay and H has a few months as well.

We have no credit card debt though. No debt besides my student loans. My first goal is to get back to two months' pay in the bank, then everything will go toward those loans. I'd rather pay them off than have money sitting in the bank.
@mystererae we have no credit card debt either. Credit cards are evil. We really want to pay off our student loans. We have a debate once a week about whether it is better to have the emergency fund we do or put it towards the student loans. DH has an insane amount of student loans. We go back and forth about what to do. I would sleep easier if the damn loans were paid off. Besides our mortgage and his student loans, we have no debt. I don't feel comfortable staying home until the student loan debt is gone so would love to get that paid off ASAP but it would take years even in the best case scenario so at this point we make sure the emergency fund is fully stocked and then put extra towards the loans each month.

I disagree that credit cards are evil. For some they might be, but not if you use them smartly. We have zero credit card debt since we pay the full balance every month. We put every purchase on our cards and some of our bills (phone, cable). We accumulate 1% points/cash back for all our purchases. That is free money! We only buy things we know we can afford and don't buy things we can't. If you don't follow that rule then you could get into trouble.

[Deleted User] · December 2013

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miss2697 · December 2013

What's an emergency fund? We had about 10k in savings when we bought our house and then everything went to shit. Now we are living paycheck to paycheck until DH gets his promotion that was supposed to happen before LO even was conceived. Moral of the story, don't buy an old house. It will be a while before we can get out of debt and build our dream house. Good luck with the process!

emandia · December 2013

Ahh what it would feel like to have an emergency fund. We don't have one anymore after maternity leave and my husband getting laid off at the same time. SO stressful. We're both back to work, but he took a huge pay cut. Saving up again is going to be a bitch.

jemasa33 · December 2013

Maybe I'll just invent something and get Oprah rich so I won't need an emergency fund. I already have some ideas. Paycheck to paycheck just isn't cutting it anymore!

Lelo2006 · December 2013

I think we have a couple years of salary saved. My husband is a money hoarder. We don't have student loans or cc debt. The only debt we have is mortgage.

We were both super fortunate to have our parents pay for school. We went to the same private college and it's not cheap.

DenverBride2005 · December 2013

I would say we have about 8 months expenses in savings, plus separate retirement, investment, college funds, etc. Similar to mermomo with saving OT pay, I am in sales and we always lived off my salary and saved commissions, or used them to pay off cars and student loans. So we have no debt other than our mortgage. Working with a financial advisor keeps us in line and accountable (ie, if a third party knows you will be contributing a certain amount of money to the college fund, you make sure to do it and the money doesn't end up going elsewhere).

MRads · December 2013

We are following Dave Ramsey's plan and we have $1000 in an e fund. However, if absolutely necessary, we have money in both of our 401ks and we have an hsa with a few thousand to cover medical emergencies.

grapeskittles4lyfe · December 2013

kaylakim said:

We have an emergency fund set up with several months worth of living expenses. We use ING (now Capital One) and have different sub accounts set up. We have a regular savings, vacation, car expense account. The cool thing is you can set up as many accounts as you want and have all of them auto deposited from your regular checking or savings. It's awesome!

We're with ING as well, for the same reason.

danigirl7181 · December 2013

We are trying to build our savings and emergency fund back up. We bought a house right before DS was born. I'm actually in school now, but we pay out of pocket, so we won't have any student loans to pay off. We occasionally use a credit card, but pay it off right away. Are only debit is our mortgage and truck payment which has no interest.

We also have a savings account for the family farm. When DH's grandma passes away (she's 85 but it wonderful condition, hopefully it doesn't happen anytime soon) DH, his four siblings and parents will be buying the farm together. It's been in the family for 150 years and we want it to stay that way.

We will feel much better about money in a year hopefully.

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