let's talk e-funds

[heygrey]

in honor of ssm jlm and because these are questions h and i are discussing right now.

What is your goal? In months or emergencies, not dollar amounts.

Why did you pick that goal? (Un)stable job(s)? Arbitrary number? Your mom told you do?

Do you ever stop contributing or just scale back? Assuming it's full funded and you haven't used any/need to replenish.

How do you define emergency? What would you use the money for?

[cahabalily]

Our goal is $10K. It's really an arbitrary number - it is attainable and would cover us for about 5 months.

We're a special case, because I have active SL (still in school) and have been counting that as our 'efund' because if something terrible did happen, we have access to that cash, even though we don't want to touch it.

Right now, an emergency is anything outside of our budget (slinks away ashamed), but I'm working a second job and the money from that doesn't go into the budget at all....so maybe anything over $1K would be an emergency...

[Deleted]

We're at 5 months right now. I'm pretty comfortable with that. We have other savings that we would use in an emergency as well (car savings, vacation savings, home improvement) which bumps us up to about 6-7 months.

[gt7301b]

We currently have 4 months of expenses in our e-fund.

We have super stable jobs and the chances of us both being laid off at the same time is slim. I am a fed and even if I were to lose my job it would take six months for me to be fired.

If we have any extra $$ we put it in investments vs. being in our liquid accounts.

We don't actually separate our e-fund from our regular account. We don't really differentiate between e-fund and savings. An emergency would be a significant repair on our home, need to travel for emergency, or job loss.

[vanillahip]

MY goal for an e-fund would be no less than 6 months of expenses. We don't have a separate e-fund from our regular savings at the moment but I consider X% of our savings absolutely untouchable unless one of us is laid off or the house burns down or the like.

HE considers every cent in our savings untouchable, unless we're pulling small amounts here and there that can be replaced immediately (within a month). I think he's nuts and what's the point of saving all of that money if we're never-ever going to use it?! Lol.

ETA- I will continue growing our e-fund past 6mos, no prob. Especially when we start spawning and such. But I'd rather invest more money than let it sit in an e-fund

[Deleted]

For us it's 3 months of expenses, not extras. Not sure how we define an emergency exactly, we talk about it and agree to dip into it. We stop adding to it when it's fully funded, but we keep saving for other goals. I'd like to eventually get DH to increase our efund.

[anna7602]

I just explained in the post below why we have 12 months' expenses in our e-fund. We continue to save every month, but periodically "clear out" the amounts above our e-fund target to invest in different ways. Most of our investments are targeted at retirement, but there are certain things we would consider cashing out to pay for DD's college or something like that if it seemed to make sense at the time.

[RandZB]

$10,000 was my safe number for a long time. It still is, although we are only at $6,000 (three months of mortgage payments and bills, excluding daycare) right now.

It's an arbitrary number, although now that I am actually thinking about the numbers I think I would like to up it to $15,000.

We don't get to contribute to it very much other than bonuses and tax refunds and such because nearly every dollar we make is allocated. But we will slowly get back up to that number. I do contribute to my 401k and dependent care account (which I get back every month).

Honestly? An emergency is when we run out of money in our checking account. Our budget is so tight that it does happen from time to time. We try to get it back up, but it's not easy right now.

[bunch]

What is your goal? It's a rounded off number very close to 6 mo salary

Why did you pick that goal? (Un)stable job(s)? Arbitrary number? Your mom told you do? Suze said so. I think. Or I kept hearing six months around here. In reality it's overkill.

Do you ever stop contributing or just scale back? Assuming it's full funded and you haven't used any/need to replenish. Once we hit the number we quit contributing and started focusing on other things

How do you define emergency? What would you use the money for? Honestly? I don't know. We've never touched it. I guess if we were hospitalized or something we'd use it as we have a really, really high deductible. Or a car wreck. Something like that. Our budget is flexible enough that I'm able to float minor "emergencies" there (car taxes, vet bills, etx)

[Deleted]

We wanted 3 months fully funded e-fund. It's more for emergencies because our jobs are secure (especially mine and we could live off my income if needed).

Once we fully funded it, we stopped contributing to it and are focusing on other short-term savings which if absolutely necessary will also be available as an e-fund.

[ReenaP]

We have a huge e-fund- about 20 months of basic expenses (excludes leisure spending). However, our new car fund is also included in here so it's actually less than that. We are also planning on a baby fairly soon so our start-up baby funds are included in here also.

[ladybrettashley]

Right now our savings goal is to have enough for our desired down payment amount, with at least a $10k e-fund leftover. After that, our goal is to save 6 months expenses before really ramping up retirement savings and you know, procreating again.

[h]

We keep at least 6 months of expenses based on our current spending levels, but we could easily live off our e-fund for 12+ months if we cut out daycare (assuming unemployment) and other extras.

In the past 2 months we have had $17K in unexpected house and car repairs, and it was nice to have the extra cash on hand without having to think about racking up interest on a CC or cashing out mutual funds.

[80sjunkie]

What is your goal? In months or emergencies, not dollar amounts.
-We now subscribe to the volenti philosophy of around 15k.

Why did you pick that goal? (Un)stable job(s)? Arbitrary number? Your mom told you do?
-Jobs are extremely stable, we have credit cards with high limits, and we have investments that we could liquidate in a true emergency.

Do you ever stop contributing or just scale back? Assuming it's full funded and you haven't used any/need to replenish.
- We split our savings, half go into a savings account, and half go straight into investments. Every few months we transfer some of the extra money from savings into investments, hopefully during a market dip.

How do you define emergency? What would you use the money for?
- This is actually why we decided we did not need 6 months salary in a low interest bearing savings account; there are very few situations I can think of that would cause us to need massive amounts of cash immediately.

[dr.girlfriend]

Our goal is is $30k, which is about 6 months-ish. DH has a very specific skill set, and at one point right before we married he was out of work for 8 months. Now, we'd probably be okay on my salary alone for that long, but I like a security blanket.

However, we are a little more lax about what we'll tap into the emergency fund for (e.g., replaced cars with cash out of it), and are slower about prioritizing rebuilding it (e.g., we tapped into it for two new cars and MIL's funeral last year, but instead of rebuilding it right away we fully funded our Roths, may do a refinance and pay cash for closing costs, etc.) once it hits the $10k mark.

[heygrey]

thanks for your replies!

our goal is $15k - that buys us a few months and a cheap move if needed if h lost his job. this is really the biggest emergency we could have right now. when we own a house or have kids, we'll definitely reevaluate.

[stephlove]

Goal: 6 months.

Who knows if I'll ever reach it. I think there's 88 bucks in there right now {hides}.

I'm slowly but surely trying to get out of this whole living paycheck to paycheck thing.

[phunluvin82]

Our goal is 6 months. It's fairly arbitrary. We're currently at ~2 months and we are not contributing to it right now. Even though I would eventually like it to be higher, we are prioritizing debt payoff, and next, increasing retirement, over beefing up the e-fund right now. We could also always pull some $ from Roth IRA if we found ourselves in a dire emergency.

We haven't dipped into it yet, but I guess we would only do so in the event that an income loss caused us to need money for bills/basic needs, a medical emergency, or maybe an unexpected major car repair. Those would be the only situations I can think of...we're renters and have no kids so no possibilities of emergencies on those fronts right now.

[Deleted]

We feel most comfortable with a year of DH's base salary in cash. I'm a SAHM and if he were to be laid off, this would give us a nice amount of breathing room for him to find another decent job.

We invest excess cash.

[boston340]

I know you said you didn't want an dollar amounts - but honestly that's what our EF is based off of. We have $15K in our emergency fund - someone on the old nest forum posted that recommendation and the way she described it made a lot of sense to us.

The $15K covers 3 months of our current budget and would cover 12 months of bare bones budget. Our house is paid off and so our "housing" is only the $180 we pay each month in insurance and taxes (LCOL area).

For us, I see having some type of catastrophic medical expense or totaling our cars and wanting nicer cars than the insurance check would cover to be our most likely emergency (over job loss).

[mokes]

What is your goal?
Ours is honestly too high right now. I think we probably have about 2 years worth of cash, I'd like it to be more like 8 months and invested. My husband feels the need to hoard the cash. We're talking about it.

Do you ever stop contributing or just scale back?
We don't contribute anymore.

How do you define emergency? What would you use the money for?
If DH lost his job, some crazy uncovered medical situation, major uncovered house problem, etc.

[Deleted]

We have 19K in an e-fund right now, but have some large purchases to make to bring it back down to 15K. We are comfortable with that number (appx 7 months of expenses)

[megs193]

We have a 12 month emergency fund that we won't touch unless my DH loses his job. I am a SAHM so it is what we are most comfortable with. If I was working too we would be comfortable with a 6 month e-fund.

We continue to save $500 each month and it goes into a general account that we could use for home improvements, car repairs, vacations, furniture, etc.

[jgleespen]

What is your goal? In months or emergencies, not dollar amounts.
3 months
Why did you pick that goal? (Un)stable job(s)? Arbitrary number? Your mom told you do?
Our jobs are stable, and we have other money investments if we needed to liquidate a large amount of cash
Do you ever stop contributing or just scale back? Assuming it's full funded and you haven't used any/need to replenish.
We move those amounts towards other goals
How do you define emergency? What would you use the money for?
Job loss, losing our house, etc
Read more: pandce.proboards.com/index.cgi?board=mm&action=post&thread=5227&page=1#ixzz1v9OfvWew

[mellymel]

Goal is 6 months of fairly bare-bones expenses.

I picked the goal because I thought that would be the longest I would be out of work for any one time (hopefully) and it's a lot to save for! I have a fairly stable job, but I'm the only income. DH is a SAHD.

We currently only have 1/3 of it saved right now due to some recent expenses so we're still building it up. Once we consider it to be fully funded we will keep saving, but just save/invest elsewhere.

I define emergency as: job loss, medical emergency, car problems/house repairs, and (maybe) helping a family member in dire need. Oh, and repairs to our stupid rental property as needed.

[crashgizmo]

Our goal keeps going up everytime we hit it, but in theory it's $15K, which is about 4 months of expenses. FI and I make about the same amount of money and either of us could pay all expenses with our salary, so the only thing that would make us use the E-fund is if we both lost our jobs simultaneously. Chances of that are low.

We aren't contributing right now because we are paying for our upcoming wedding and new carpet for our house. After that we'll likely save more but use it for a new car down the road or another trip.

Emergencies for me are: job loss, necessary car/house repair, or medical bills.

[quickstepstar]

What is your goal? In months or emergencies, not dollar amounts.
15K, it is 3 months w/o Nanny costs

Why did you pick that goal? (Un)stable job(s)? Arbitrary number? Your mom told you do?
Volenti told me that's a good idea

Do you ever stop contributing or just scale back? Assuming it's full funded and you haven't used any/need to replenish.
After we hit our goal, we will redirect money towards investments, for general purpose.

How do you define emergency? What would you use the money for?
Anything that's not in our budget (we do budget for general car maintenance, future car purchase, down payment, vacation, IRS, etc. separately)

[jenn248]

We have four months expenses in our e-fund. I wouldn't mind getting it up to six at some point, but right now, I would rather put our savings into other areas (travel, new car, kid fund, etc). We both have fairly stable jobs, and we have money we could pull out of investments if we had to.

[rex]

10k. It's how much I'm comfortable seeing just sitting in a savings account. We're very close to this mark, and once we hit it we will begin investing further savings.

[rt2008]

Our goal is about $10,000. It'd be about 2 1/2 months of expenses as they are. More if we cut what's unnecessary.

Don't know how we got to that number. Just seems like a good amount for where we are in our life. Our jobs are both pretty stable.

I think once we reach that, we'll work on other goals--kids' educations (when we have kids), save more for retirement, etc.

Emergency-- job loss, big medical bills, house repairs, car repairs..