How many months in emergency fund?

[Tink-aholic]

Single mom here. I have almost 36 months in a liquid EF, with no debt other than mortgage. I am also trying to pay that down as fast as I can. In the unlikely event that I am laid off, I would hope to have UI help stretch that out a lot further, if necessary. I am also in a union, so I have some reasonable job security (though, nothing is sure in this economy).

 

[lakelandgal70]

We have at least 5yrs

 

[Took]

What does the first line mean? Are you implying others are less than truthful? If that is what you are implying they am I to believe that you are less than truthful in your post?

I think the poster mis-typed. He/She probably meant to say "not having READ all of the replies yet..." I don't think he/she was accusing others of being untruthful.

 

[zurgswife]

Zero!!!.....After 2 layoffs in 6 yrs. Even if we had any it would pretty much be toast by now.

 

[LovableGluttons]

This is the first message board where there are people who are savers like my husband and I. We've felt pretty weird over the years.

My father was military, so was my husband. I hated the lifestyle and begged my husband to get out for 20 years.

He finally did in 2007! LOL He retired.

This was my "normal". The divorce, outrageous living choices, lack of savings mentality is rampant in the military. Also, the confidence that a job in the civilian sector in the same field is just waiting to snap you up as soon as you get out.

I saw too many people get out and not have a great paying job lined up. That terrified me!

I also did not want my financial future to be dependent on my husband. Call me neurotic, fine!

I'm a registered nurse. Before I had children in my late 20's, I worked at least one full time job, usually with another part time. My husband and I lived on his small military income for 15 years and saved mine. Sometimes, we were also able to put away some of his too! We are still contributing to it after all these years, all of my income and some of his too.

Now, in our mid 40's we have saved enough to live on for many years, albeit frugally. That's our emergency fund. We are both full time employed professionals. We have no loans, no mortgages, no credit cards, and drive a 2007 and a 1994 paid for in cash vehicles. We've saved for each of our two children to attend USF for four years and live at home.

I'm ebaying and working a part time job to save for an in ground pool/jacuzzi/outdoor living area. What I want will cost about $55,000, so I'm working and saving for it like crazy!

I've posted about this here before and I don't feel what my husband and I have done is unusual or extreme.

I'm attending a Family Nurse Practitioner program and paying out of pocket for tuition and books.

Once my children are finished with college, DH and I would like to scale down to part time and begin traveling extensively. To make that happen, we still need to save to have enough for a retirement should we need to. As it stands, neither DH or I plan to actually ever stop working.

While guidelines are nice, OP, figure out how much it would take for you to feel secure financially. That's the amount, but keep adding to it!

HTH!

 

[ilovemk76]

I think the poster mis-typed. He/She probably meant to say "not having READ all of the replies yet..." I don't think he/she was accusing others of being untruthful.

I don't believe it because the comment was followed by .

 

[dvcgirl]

I believe everyone in the thread. Because mostly, it's only people with adequate emergency funds who will answer. That's not to make anyone else feel badly. Hopefully it will inspire some to get an emergency fund started if they are in a position to do so. Unfortunately, that's not so easy for a lot of Americans right now.

We've got one year of *expenses* in our EF. It's not a huge amount of money either, because we have no debt and it just doesn't cost a lot to run our household on a monthly basis. The key is...it doesn't have to be months' worth of your *salary*....rather expenses.

Like others here, it would be very unlikely that we would both lose our jobs simultaneously. And either one of our salaries could easily support the household. Also, I operate a small business, and so I can't get "laid-off". However, if god forbid my DH was to become ill or something horrible like that, I'd want to be with him (and vice versa on his end)....hence, the large EF.

As for what and where the "emergency fund" should be....here are my thoughts. The emergency fund should be liquid....in a money market fund or a savings account. I think it's okay to rely on the principle of your Roth account as you're building a completely separate fund...but I don't think that you should always fall back on your Roth as your EF. The money in your Roth IRA should be invested...not liquid.

Nor do I think that you should rely on a line of credit for your EF as your *only* source of funds. Right now a full 25% of Americans are "underwater" with respect to their mortgage. Many others don't have enough equity to qualify for a HELOC. I just think that this latest financial debacle was scary enough to disqualify the HELOC as an option for most Americans.

Anyway, that's my 2 cents on Emergency Funds...and it's probably worth just that amount to you

 

[Planogirl]

Not having all the replies...

All I can tell you is that DH was recently unemployed for 2 years

At the time he lost his job, the only debt we had was our mortgage (wish that were still true, but will be in about 4 months). If we had only had 6 months in our emergency fund, we'd have been up the proverbial creek without a paddle. Fortunately, we had almost 18 months in that account, plus some other savings that we could pull from. Additionally, I have a pretty good paying job that's as secure as can get these days.

He's been back to work for about a year now and we are working toward having a full 3 years in our emergency fund. It might be a little overboard for most people, but believe me when I tell you that a 2 year unemployment scared the you-know-what out of us.

I can relate.

DH was laid off many years ago and it took him a while to get on his feet. Once we were feeling a little more secure (that takes a long time!), he suffered a mild heart attack and his newer job let him go at the same time. Something about poor record keeping. He maintains that he did nothing wrong and we even went to the EEOC because they withheld his last paycheck for a while.

I had a job but my previous company had downsized so I was starting over myself. We had medical bills on top of regular bills and any savings were wiped out by all of that.

It's been years since that happened but we have paid off most of the debt, saved a little and hopefully will stay on our feet now. Such things as travel have been super budget (DH gets hotel points in his current job ) and we haven't bought anything new besides a PC in years. It's tough to come back even when you do have savings.

I'd suggest shooting for a year if you can.

 

[abcboys]

We don't have very much. Maybe 2 months worth. I'd like to save up at least another months worth. We don't have a lot of debt, just one vehicle which we are getting ready to pay off by summer. It just seems there is so much to save for: vacations, house repair, new vehicle when needed (mine is a 99 with 125k), kids college fund, 401K etc. that nothing ever gets built up very fast.

 

[disykat]

We don't have much either, usually about 3 months with drastic cut backs. Right now we have a little more pretty liquid money because we're getting ready for our first tuition and housing payments.

We have no debt, and could use our kid's college funds, our extra retirement money (we wouldn't touch dh's 401K) and our home equity (sell and move) if we needed to.

I'd love to have more emergency money, but I'm pretty happy with the reality of living in a recently paid off house, having plans in place to pay for our kid's college, and being able to take an occasional family vacation.

Although Suze Orman would be letting us jet off to Europe or put in a pool, I feel like we're in a pretty good place.

 

[Bungle]

We are working on ours. We could make what we have stretch a year but honestly we would have to cut out a lot. My goal is to eventually have a year EF that would keep us at our current comfort level.

We didn't have much of one last time my husband was laid off and it was brutal. I do not want that stress again.

 

[AmongMadPeople]

I'm so glad I posted this question because everyone's responses have made me think about things I hadn't thought of. I never considered health insurance, because we currently don't pay premiums. I also forgot about unemployment, but that would help a little.

I took a hard look at our budget and if we cut to bare bones our current goal amount will last us 8 months. Both my husband and I are exploring other options because it seems like everyday brings new bad news at the office.

And if anyone is reading who doesn't have an emergency fund, or has a small one, take lessons from what other people have gone through! 1 year ago we would have only lasted 2 months without our jobs, but we made a choice to change things. It certainly isn't easy, but you have to start somewhere.

 

[LovableGluttons]

I'm so glad I posted this question because everyone's responses have made me think about things I hadn't thought of. I never considered health insurance, because we currently don't pay premiums. I also forgot about unemployment, but that would help a little.

I took a hard look at our budget and if we cut to bare bones our current goal amount will last us 8 months. Both my husband and I are exploring other options because it seems like everyday brings new bad news at the office.

And if anyone is reading who doesn't have an emergency fund, or has a small one, take lessons from what other people have gone through! 1 year ago we would have only lasted 2 months without our jobs, but we made a choice to change things. It certainly isn't easy, but you have to start somewhere.

Please don't get discouraged! Troubled times at work are giving you and your husband the opportunity to find another path and get your savings going.

My husband and kids require much more money to survive than I do. You might be surprised how little you could live on in a pinch if you have no debt, not even a mortgage. So your savings might last you longer than you think!

 

[Colleen27]

Our liquid savings fluctuates, because we don't differentiate between emergency/unemployment savings and the money we put away to get through the slow winter season. We aim for 12mo living expenses in the bank in October, knowing that we'll use about 1/4 of that to get through the winter.

I know we should probably have more - we're essentially a one income family, living in a depressed part of the country (Detroit area), and DH is self-employed in an unstable field (construction) - but there is a limit to how much frugality and caution I'm willing to accept. Our lifestyle is such that there's not a lot more to cut - just internet, cable, and travel - to save more without sacrificing other savings goals, and I'm not interested in living totally bare-bones to further build the emergency fund.

 

[ChiCat]

We have only three months but between the two of us we have three jobs (I have two in a more stable industry). We don't have many bills, no cars, rent, his small student loan payment. We should start to build it back up come fall and winter when my field starts getting busier.

 

[At World's End]

My DH just got laid off, and I'm a SAHM, so we are wishing we had more of an EF. In this economy, no matter what you have, it probably won't be enough! Thankfully we have about 4 months of his salary in liquid accounts, with another year's salary in stocks. Our fear is losing our house, since unemployment will just cover the mortgage. But COBRA is another $550/mo. We've cut alot of expenses since finding about about the layoff, and we've been amazed at how we've been able to make our money stretch. I'm so grateful we have some kind of EF. This is a terribly scary time, and without the EF I would be a complete mess. We have seen co-workers laid off over the past few years, and they either had to move, take lower paying jobs, or are still unemployed. I just applied for a job that I'm way over qualified for, and found out that 170 people applied for the same job. Wish me luck! I always thought that if we were in this situation, one of us would just "get a job" to make it work. But we're finding that it's not that easy.

 

[rileyreese]

I feel like a huge looser BUT we are just starting on baby step 1 and working on our $1000. I read this thread to my Hubby's last night and he said having a 6 month emergency fund would add 10 years to his life!!!! My Hubby's has a great stable job but I stay at home so I have no income so if anything happened we would really need an emergency fund. Our goal by the end of summer is to have the $1,000 and be working toward more.

 

[LovableGluttons]

I feel like a huge looser BUT we are just starting on baby step 1 and working on our $1000. I read this thread to my Hubby's last night and he said having a 6 month emergency fund would add 10 years to his life!!!! My Hubby's has a great stable job but I stay at home so I have no income so if anything happened we would really need an emergency fund. Our goal by the end of summer is to have the $1,000 and be working toward more.

No, you are not a loser. It is better to see the light and make changes before life forces you.

That makes you a winner!

 

[lakelandgal70]

No, you are not a loser. It is better to see the light and make changes before life forces you.

That makes you a winner!

I totally agree with LovableGluttons! You are not a loser!

 

[Bungle]

I feel like a huge looser BUT we are just starting on baby step 1 and working on our $1000. I read this thread to my Hubby's last night and he said having a 6 month emergency fund would add 10 years to his life!!!! My Hubby's has a great stable job but I stay at home so I have no income so if anything happened we would really need an emergency fund. Our goal by the end of summer is to have the $1,000 and be working toward more.

Don't feel like a loser. All emergency funds start somewhere.