What is a fully funded emergency fund to you?

[sadlebred]

What do you consider a fully funded emergency fund as defined by months of living expenses?

[HitchedIn2006]

6 months of bills/expenses. I don’t count any fun money we normally spend in a month as part of expenses.

[mccallister84]

Our is 6 months of net pay. Just because it was a very easy metric to come up with.

[whitemerlot]

I’m 40 and pretty set financially and feel best with 6 months of pay in a cash account for emergencies. I’m sure less would be fine since I’ve literally never accessed it.

[5thofjuly]

Because of our job security, we actually felt really good at 3 months, bare bones, both of us got fired tomorrow. And, because we didn’t have our “real” jobs until we were 30ish, it took us a while to get there. After that, it made more sense to us to use anything beyond that to pay extra on things like our mortgage or invest extra in certain pots. My answer might be different in 10 or 20 years.

[scout8]

I don't feel comfortable with anything less than a year, but my H and I are both 100% commission. Our incomes also fluctuate a lot. There are times we can go a few months with nothing coming in.

[aspentosh]

6+, but I am a SAHM so that is in order for me to feel comfortable.

And it's 6+ of bare bones but not having to stop things like fairly basic internet, etc.

Before, in debt payoff mode without our DD, it was a 2-3 months.

[tripleshot]

I voted for 3 months. DH and I both work and have stable jobs in different industries. If I SAH, I’d want at least 6 months.

[wildrice]

I guess I'm an SS. My goal is to keep 10k in an emergency fund. I guess that's a little over 3 months of straight "bills" but wouldn't include groceries or any incidental expenses. So if we totally lost our income and had no 2nd job and no unemployment, we would probably only last around 2 months or so.

But that situation is really, really unlikely, and I feel like if we both were completely without income for long we could borrow from or move in with my parents. That would truly be worst case scenario (and would require moving halfway across the country to a place we don't want to live!) but realistically probably won't ever happen.

If we had the rest of our finances in order to a point where it was reasonable to keep a ton of money in an e-fund I might feel differently. But we need to do things like save for retirement, eventual new cars, maybe a down payment on a house, etc, so stockpiling cash for "emergencies" that will probably never happen isn't really a priority.

(we do not own a house, either, which might change my answer someday).

[puppylove64]

We sold a house and made good money off it. We put 20% down on our next house. I told Dh I didn’t want a sickness or job loss to make us lose our house and all that equity. Our emergency fund is 12 months mortgage payments. I don’t care if all other bills don’t get paid or we lose cars, I don’t want to lose our home

[gt7301b]

We are also a SS. We keep very little in straight up cash, but do have various ways that we could access money in a true emergency. We also both have pretty stable jobs so if one of us lost our job we could go bare bones and pay the essentials. If we needed a large chunk of cash we could have the funds in 2-3 days.

[mbcdefg]

We try to have enough in savings for about three to six months’ of regular expenses ... we wouldn’t cut cable but we’d likely pull DD from daycare and not eat out anymore.

That’s not taking into account a major home repair or a medical emergency/etc. Our house and our home appliances tend to crap out on us at the worst possible times, lol.

MH is a tenured teacher and has a second job during the school year, but he doesn’t work/get paid during the summer. We had to pull from our funds this summer when I unexpectedly lost my job during his last week of school - my unemployment checks covered groceries and put a little bit toward the bills but obviously not enough. We had planned to pull DD from daycare anyway during the summer so that certainly helped. Now that I’m working again we want to replenish the savings fund back to what it was.

[waverly]

DH is in the more unstable business. So living expenses minus fun/ eating out a lot and most of the childcare with my salary and unemployment. We are lucky that only works out to about 2K a month, so I guess we have 10 months emergency fund.

But really I think most people are thinking catastrophically both people lose their jobs and no unemployment, so that would be 3 months bare bones ish.

[steamboat185]

We have 2-3 months of bare expenses in cash. We used to have more, but felt like it wasn’t the best choice to leave that much out of the market. We have several credit cards that would see through the time it would take us to liquidate investments or replace some of the income through a temp gig.

[Covergirl82]

I also estimate based on bare-bones living expenses. Based on that, we have about 2.5 months in our e-fund right now. I would like to get it to 6 months eventually, and currently I'm contributing $35 from each paycheck (biweekly payroll) into that account.

[madringal]

3 months of our combined take home income. That would last us about 6-9 months of bare bones expenses.

ETA: we work in banking and utilities - so we have extremely stable jobs.

[Susie]

We have 3+ mo. of income, and I feel relatively secure, but I'm working to build it to 6 mo. nonetheless.  # of months of income/job loss isn't the only measure I'm thinking about; as our family gets bigger the possibilities also grow for what kind of catastrophic event could occur that could require a pile of cash.

[goldengirlz]

I voted 6+ months because that seems to be the rule of thumb, but we do not keep that much in cash. We’re in a VHCOL place and our monthly burn rate is high.

We keep about three months in cash and the rest invested (non-retirement investments.) That would be enough to cover something like an emergency home repair without having to sell shares (and worry about the tax implications). For something longer term like a job loss, we would dip into our brokerage accounts.

[lolalolalola]

We have never had a separate emergency fund, I want my money to "work for me". We are lucky enough that we have always had access to other forms of funds if we were ever in an emergency - home equity, unsecured lines of credit, investment accounts, and credit cards. I know this isn't an option for everyone.

[ribollita]

Sept 11, 2019 8:51:59 GMT -5 gt7301b said:

We are also a SS. We keep very little in straight up cash, but do have various ways that we could access money in a true emergency. We also both have pretty stable jobs so if one of us lost our job we could go bare bones and pay the essentials. If we needed a large chunk of cash we could have the funds in 2-3 days.

Same. We have $20k in cash and other earmarked saving accounts and pots of money to access. I don’t think of our need as being in months given our job security and overall finances.

[scm1011]

Sept 11, 2019 12:42:41 GMT -5 ribollita said:

Sept 11, 2019 8:51:59 GMT -5 gt7301b said:

We are also a SS. We keep very little in straight up cash, but do have various ways that we could access money in a true emergency. We also both have pretty stable jobs so if one of us lost our job we could go bare bones and pay the essentials. If we needed a large chunk of cash we could have the funds in 2-3 days.

Same. We have $20k in cash and other earmarked saving accounts and pots of money to access. I don’t think of our need as being in months given our job security and overall finances.

Same. We keep $15K in a dedicated emergency fund, but have investment accounts we could access if necessary. Also the likelihood that we’d lose both our jobs plus our rental income all at once seems very low, so I comfortable with just the $15K.

[sadlebred]

What about those of you who are single or have only one income? What about your emergency funds? I know it's unlikely that a dual income household will have both jobs lost at the same time.

[melmel48]

I would LOVE 6 months... but I just don't make enough to save that much anytime soon. I currently have 1.5 months between my regular savings accounts, however I do have some liquid accounts my financial planner is holding for me. I would really like to not tap into those if I don't have to.

If I needed to I could cut down on some bills, such as cable and stop saving for vacation, running and regular savings. I could walk to/from work to cut down on gas.

[simpsongal]

Sept 10, 2019 21:32:53 GMT -5 sadlebred said:

What do you consider a fully funded emergency fund as defined by months of living expenses?

i was going to say, we don’t define it in terms of months’ expenses we just have a target minimum. Right now it’s $12k.

[red]

Hmm, I voted 6 months, but I think we currently have 12 in there. Mostly because my H likes a certain number. We’ll probably pay his car off in a few months and I will be on mat leave starting Dec, so there’s a bit extra cushion at the moment.

[mlkgls]

Sept 11, 2019 14:51:50 GMT -5 sadlebred said:

What about those of you who are single or have only one income? What about your emergency funds? I know it's unlikely that a dual income household will have both jobs lost at the same time.

Single, one income here. I have 6 months of net pay set aside in a money market account but would feel more comfortable with 12 months, even though I have an extremely stable job.

I’m also aggressively saving for a new car and potential home renovation project so while everything above a certain threshold in the account is theoretically in the car/project fund, it really could be used for anything if needed. I guess this means I have a little more than 6 months, but it doesn’t feel that way on my spreadsheet. 

[namasteak]

6 months bare bones which is in a money market account + our annual house repairs fund which is in a regular savings account. (we averaged the 1% rule and square foot rule)

I’m a SAHM so we only have DHs salary but our only debt is our mortgage.

[mich1]

Sept 11, 2019 14:51:50 GMT -5 sadlebred said:

What about those of you who are single or have only one income? What about your emergency funds? I know it's unlikely that a dual income household will have both jobs lost at the same time.

I used to have 2 months.  However, my job was incredibly stable and I carried 400+ hours of sick time, and as much vacation time banked as I could (another 6 weeks).

When I got sick, this was sufficient to carry me until LTD kicked in.

[sadlebred]

Thanks, everyone! I ask because I am single one income and was curious. I have two months of liquid assets & access to more that I could pull. My stable job became very unstable over the summer. Chances are my dept. will be fine since we are horribly understaffed, but you never know. I am not looking because it's a great place to work, and I want to see how things play out over the next 6 months. Plus, the vacation time and other things I have built up make it worth staying for now. If I get past the next 6 months it will be stable again. I am confident of finding another position quickly because of what I do and tons of opportunities in my large city.

[Covergirl82]

Sept 11, 2019 12:30:03 GMT -5 lolalolalola said:

We have never had a separate emergency fund, I want my money to "work for me". We are lucky enough that we have always had access to other forms of funds if we were ever in an emergency - home equity, unsecured lines of credit, investment accounts, and credit cards. I know this isn't an option for everyone.

I agree that there are other options, but, IMO, cash is easiest and most accessible when a job is lost.  I would worry about being able to be approved for a loan or line of credit in the event income is lost.  (Our credit union made it seem near impossible for us to get a home equity loan to buy a vacant piece of property, and we ended up having to go through a bank.)  I would also worry about the additional cost of interest with a line of credit, as the interest rates are often variable (such as a HELOC).  A cash e-fund is my number one source for emergency income replacement, with credit cards and/or a hardship withdrawal from retirement savings as back-up/last-ditch options.