How many months in emergency fund?

[ZehnJahren]

I have three months of full expenses - I could still continue to live the same way I do now, buying the same amount of food and clothes and entertainment as I do now. However, I really want more - but I have a feeling my savings is about to be decimated by the purchase of a car. Mine is in bad, bad shape.

 

[arthur06]

Depends on what exactly is an emergency fund? I hate putting money into my bank's savings account with there .5% interest. We have about 1 month worth of totally "liquid" EF. However, in better interest bearing accounts we have about 7-9 months worth. And, if we could get a few more of our bills paid off, we would be closer to that one year in EF.

 

[lisaross]

I have 1200.00 in an emergency for anyhousehold items that go example - refrigerator, stove etc.

Also have about 6months Emergency fund for living expenses - no this does not include allthe extras but it covers all bills and necessaties etc for 6 months

 

[SaraJayne]

We have six months, all liquid and working towards 12.

Those six months worth is at current spenditures, so it would last longer once the belt would be tightened.

 

[NY Disney fan]

Here's a (contraversial) tip on how to boost your EF (that you won't find in any book). I laid the foundation for a large EF by stopping my 401K plan for 1 year. I re-allocated the money for my retirement and started an EF. After one year, I then started my 401k plan again. Like I said, not the most ideal plan but I can now sleep better at night.

 

[neatokimmo]

Here's a (contraversial) tip on how to boost your EF (that you won't find in any book). I laid the foundation for a large EF by stopping my 401K plan for 1 year. I re-allocated the money for my retirement and started an EF. After one year, I then started my 401k plan again. Like I said, not the most ideal plan but I can now sleep better at night.

But if you lose your job, your 401K is rolled into an accessible IRA. So would it be better to continue maxing out contributions for the tax benefit than to put the money someplace where you pay tax?

It's funny, I just had this conversation with a co-worker!

 

[NY Disney fan]

But if you lose your job, your 401K is rolled into an accessible IRA. So would it be better to continue maxing out contributions for the tax benefit than to put the money someplace where you pay tax?

I don't see it that way. My retirement money needs to be kept locked up and should not be accessible at all (unless its a do or die situation). EFs and retirement money should live on two different planets. Others will disagree but this is my saving philosophy.

ETA: your daughter is soo cuuute!

 

[Hollymom1229]

DH and I have an EF that would cover six months of our current lifestyle if one of us lost our job. As we learned last year when DH was laid off, that money can be stretched quite a bit further. We'd like to get it up to a year, but as we are still recovering from when he was last out of work that will be a while.

At the same time we have enough in other areas to go for an additional 2 years if need be, but I'd rather not touch those as they are meant for our future.

 

[pixiechick]

we can cover 6 months of expenditures.


We could limit it if possible, but I'd hate to do that unless critical. Hopefully, with our skill set, we could find something comparable in a reasonable time period.

 

[bdcp]

We have maybe a month in liquid, but we have easily 6-7 years worth in investment/401K's so we're in no danger of losing our home or anything else if it came down to losing our jobs. It also helps that in 6 yrs DH will start to draw his navy reserve retirement pay. We actually discussed everything with our financial planner recently. He says other than the fact we don't want to lower our investment balances, that we're in great shape and could get by for quite a while with no outside income. I just hope everyone who is putting cash in savings is also putting money away towards retirement in 401k's and IRA's where they will earn a lot more over time than current bank interest rates.

 

[disneyofcourse]

I keep mine at just a little over 18 months of full coverage. Meaning overestimated bills, housing, car budget, pets, etc. Is it over kill? Maybe, but I like it. I believe that even having $200 set away in a special account is great. Many of my friends have ZERO because they rather spend it all on clothing and eating out. I personally couldn't do it! I like my safety net. I just budget a certain % of each check to go towards each account that I set up. I love seeing that so many people on here have one or are starting one.

 

[amylevan]

We have 1 month in fully liquid savings. I'm like the poster above, I can't stand having money sit there earning next to nothing in interest.

We have about 12-18 months in stocks/mutual funds.

After that, we have 401ks that we've been funding at about 10% since our early 20s...so we have much more there that I plan to not touch until retirement, but it's there in the event we absolutely needed it.

We still have a mortgage, and we owe a little on our fifth wheel camper still, but other than that we are debt free.