Do you have an emergency fund??

[gracie1]

I know how the financial guru's are stressing about an emergency fund, but it's something that I don't have. I have been trying to do one but I make just enough money to pay my bills. (no...I have no luxuries on there either)

Just curious if I am the only one on here without the 8 month emergency fund

 

[AristocatFan]

8 months??!!! No way! We have maybe one month put back but certainly not that much!

 

[wall*e2008]

Not many will have an 8 month fund but having one to cover unseen expenses, such as a car repair, is a very desirable.

DR talks about having a $1K fund and then to pay off debt. I saw that you have a CC from the other thread. Do the DR and get the $1K fund and then try to pay off the CC faster. After that you can beef up the EF.

 

[RachaelA]

We have just over 6 months expenses in an e-fund probably closer to 7. I eventually want to get to 9 months.

 

[msmayor]

We have 10 months, but in a true crisis where we might need to tap into retirement accounts....MUCH longer.

 

[ambientex]

My wife and I follow the DR plan that wall*e2008 mentioned. We put $100 dollars in the back to handle any little bit that Murphy might throw at us, and are currently in the process of building our 6 - 8 months living expenses emergency fund. I would highly recommend this course of action. It just makes you feel more secure.

 

[robinb]

So, the Emergency Fund time frame is now 8 months? It's interesting to me that it has expanded in these hard times. It's harder to get and keep a good paying job, things are more expensive and it's harder to save and now what used to be 2 months or 4 months or 6 months is now 8 months. That's 3/4's of your yearly living expenses! I know that it is intended to "catch you" should you lose your job but in many ways it's seems to be yet *another* virtually unattainable financial goal and makes the average person feel like a failure when they can't put away 10's of thousands of dollars.

In any case, yes we have it but it's not totally "liquid". My DH bought a lot of stock and mutual funds when we were both working and it would be enough for us to make it 8 months and even longer.

 

[Gretchen3ajoshmom]

We do not have 8 months....only about 3.....DH is paying(through the nose) child support for a 16 year old brat; whose mom and step dad make triple (yes I said TRIPLE) what we make.... when she finally turns 18 (Labor Day 2011- you're all invited to that party!) we will be in a better financial situation and more able to build savings....We are still paying off debt!
Its hard for me to know that we are doing everything responsibly - coupon/sales for groceries, clearance racks/thrift stores for the kids clothes, etc... And his daughter can throw money around and wear name brands, get her hair cut at a snobby salon etc.... My husband's hard earned money being pi**ed away....oh well....reality will set in when the doll is cut off- and we'll have a FAT emergency fund in only 12 months from then!!

 

[RachaelA]

So, the Emergency Fund time frame is now 8 months? It's interesting to me that it has expanded in these hard times. It's harder to get and keep a good paying job, things are more expensive and it's harder to save and now what used to be 2 months or 4 months or 6 months is now 8 months. That's 3/4's of your yearly living expenses! I know that it is intended to "catch you" should you lose your job but in many ways it's seems to be yet *another* virtually unattainable financial goal and makes the average person feel like a failure when they can't put away 10's of thousands of dollars.

In any case, yes we have it but it's not totally "liquid". My DH bought a lot of stock and mutual funds when we were both working and it would be enough for us to make it 8 months and even longer.

Well now people have been unemployed upwards of 6+ months. Times have changed. People never thought it would get to this so why shouldn't we save so we are prepared if something like that happens?

And its not unattainable if people didn't live beyond their means. That's the problem.

 

[gracie1]

Not everyone lives above their means. I mean, yes I do have 2 cc that have a balance at 0% interest for both right now. But as far as luxuries, etc... not everyone has them and it is possible that they still have to scrape by. I think alot of it depends on the area that you live in. We have a very high cost of living where I am and it's hard to make it on a single income. When we went to florida in May I couldn't believe how cheap it was there

 

[Kickapoo Joie Juice]

We have a six month liquid fund and if we had to tap into retirement, a much longer one. Knock wood that we never need to.

I think DH wants the liquid fund to be 1 year.

I told him fine, but any more than that and it becomes "Kickapoo's New Car Fund" (current car is a 6 year old paid for Mazda MPV minivan with 90k miles on it-trying for 3 more years on it before it poops out)

 

[RachaelA]

Not everyone lives above their means. I mean, yes I do have 2 cc that have a balance at 0% interest for both right now. But as far as luxuries, etc... not everyone has them and it is possible that they still have to scrape by. I think alot of it depends on the area that you live in. We have a very high cost of living where I am and it's hard to make it on a single income. When we went to florida in May I couldn't believe how cheap it was there

Not everyone you are right. I shouldn't have said that. But the issue is if they had enough money to save but spent it on luxuries and now have nothing saved. Then they want to be bailed out for it. like the women who had all the dvc contracts and was still going on vacation.

save and then once you have enough saved spend some of the extra money on fun stuff. the luxuries do not need to be part of a necessary budget (cell, cable, internet, etc).

 

[gracie1]

Not everyone you are right. I shouldn't have said that. But the issue is if they had enough money to save but spent it on luxuries and now have nothing saved. Then they want to be bailed out for it. like the women who had all the dvc contracts and was still going on vacation.

save and then once you have enough saved spend some of the extra money on fun stuff. the luxuries do not need to be part of a necessary budget (cell, cable, internet, etc).

Can't agree more

 

[Jennifer in MI]

So, the Emergency Fund time frame is now 8 months? It's interesting to me that it has expanded in these hard times. It's harder to get and keep a good paying job, things are more expensive and it's harder to save and now what used to be 2 months or 4 months or 6 months is now 8 months. That's 3/4's of your yearly living expenses!

When dh and I figured out our goal for savings for 6 months of living expenses, we didn't figure in things like: a second car, cable, cell phones, children's activities, etc. These are regular expenses, but if it came down to it, all of them would be cancelled. So our 6 months of living expenses is more like 20% of his current income.

To the OP - yes, we have about 6 months of living expenses in an ING account.

 

[PollyannaMom]

Cash for 8 months expenses, no. (We have some, but not that far out.) A back-up plan for that long, yes.

 

[meandmytwogirls]

We have about 6 months in cash on hand and could tap retirement funds if need be. Hope it doesn't come to that!

 

[friskykitten]

Not everyone you are right. I shouldn't have said that. But the issue is if they had enough money to save but spent it on luxuries and now have nothing saved. Then they want to be bailed out for it. like the women who had all the dvc contracts and was still going on vacation.
save and then once you have enough saved spend some of the extra money on fun stuff. the luxuries do not need to be part of a necessary budget (cell, cable, internet, etc).

I'm that woman who had all those DVC contracts and I never ONCE asked to be bailed out for it. I asked for advice on what others thought we should do to avoid being bailed out. And we had a six month emergency fund already in place that we will have exhausted by the end of July or August. So before you list my situation as a BAD example please make note that we HAD six months ER fund that we will be making last for seven or eight months. And that was in addition to our "luxury" items we purchased. After we had that ER fund in place, mostly due to tax refunds, we then lived beyond our means and did not have extra to put into savings every month. That is where we made our biggest mistake.

To the OP, yes we had a six month ER fund set up. With changes made and our DVC contracts on the market for sale we will be able to make it last for seven to eight months. Once the DVC contracts sell we should be good for even longer. Honestly in today's economy, and depending on where you live, it would be wise to have about a year saved up. Here in Florida most of the people who have lost their jobs have taken a year or more to find employment again. Which is what our families problem was that both my DH and I lost our job in the same week and after six months I wasn't supposed to start freaking out about our cc debt and other obligations? It just took me some time and help from my DIS friends to help me see what MAJOR steps we needed to put into place since our ER fund was not going to cover us for longer that it was going to take to get jobs again to cover all of our expenses including our "luxuries".

The point I am making is that in addition to our ER fund which we are making last longer with changing our lifestyle and standard of living we will still have to sell off our ONE luxury, which was DVC, and we are going to have to find good homes for some of our furbabies. Both of these changes are very hard to take emotionally and mentally. Basically, you can never be overprepared. Sock away as much as you can in an emergency fund. But in today's world it still might not be enough. So, if you can, make other changes in your expenses.

 

[shortbun]

I don't just have cash in a bank somewhere but I have available funds that would cover us for over a year without tapping credit cards or retirement.

 

[robinb]

And its not unattainable if people didn't live beyond their means. That's the problem.

Sure, some people live beyond their means. They make front page news when their house is foreclosed on. It's easy to think that everyone is like them but I don't think they are. I think most middle and lower class folks work long and hard for their money and there just isn't anything extra left over. They *might* be able to scrape up a DR $1K fund but 8 months? No way.

The other thing that I want to point out is asking here is much different than asking the general population. The general population doesn't take multiple vacations to Disney because they can't afford them.

Gotta go and take my DD to swim team practice ... a little luxury that I can afford.

 

[lecach]

We have enough cash in our savings account to cover expenses for 6 months if we both lost our jobs. DH makes less than I do and if he lost his job - which is entirely likely since he is a newspaper reporter - we'd be okay for a year or more. We did have more in the account but I was laid off in 2007 and was unemployed for 6 months. We had to take out $10,000 to cover what unemployment didn't.

I feel pretty secure now. I work for a continuing care retirement community with a 10 year wait list. The organization is financially sound. Unless I do something to screw up I should be okay.