If you found $15,000 what would you do with it?

[Dziactor]

I would pay off the highest interest loans.

 

[katied]

Paying no attention to what Dave Ramsey says, I would say an emergency fund of 6 months would need to cover any and all bills that you have to pay in that 6 months.

Losing a job, might cause a reduction in some expenses (such as child care) but you would need $$ to cover your monthly reoccuring expenses...such as food, mortgage, car payments, utilites and the like.

I agree that in planning your emergency fund, you really want to look at what you spend every month and multiply that by 6. Yes, you can scale some things back - but - you'll also have to pay COBRA for heath insurance, which will cost far more (maybe $1K or more per month), so it's best to have a bit extra money.

Also, some say you can cut child care costs - that may be true, depending on your arrangements. You may have to give 30 days notice. You may be in a area where there are wait lists, so if you pull your child, you may not be able to get them back in if you find a job. Also, you may need child care so you can spend time networking, interviewing, updating your skills, etc., to allow you to find a new job.

So - I recommend planning 6 months at a minimum based on what you spend now, and then if you need it, see what makes sense for you and your family in terms of cutting expenses then.

 

[QVCshopper]

My DH and I worked for a company that paid a percentage of your salary as a bonus each year. (Only tenured employees got that much; our weekly pay was lower than competitors.) Between the two of us, we pulled in about $20K all at once--separate from our weekly income. A lot of our coworkers used that money to pay off credit cards, buy cars, go on trips, etc. We used ours consistently to pay off our mortgage--never used it to live or anything. In about five years, we paid off our mortgage, which has changed our life so much for the better.

 

[MAH4546]

Put it all in General Motors stock when GM issues an IPO within the next year or so.

I'm being serious, by the way, absolutely serious.