Is $1000 enough these days?

[Dot]

Is $1000 enough for the EF these days? We're finding more and more that emergencies are exceeding $1000. With the cost of everything going up, we're thinking of increasing our EF to $2000. Any thoughts?

[mauimagic]

Dot, I think that's a great idea. $1000 is our minimum amount - sort of like the first step. I want to get ours up to $5000 as fast as possible......mahalo for your post - I needed a reminder!!

[Lady_V]

1000 is a great place to start... but I don't think people should stop there.

I also think the level varies person to person. A single person who rents and takes a bus to work may not have the same emergency expenses as a family with 2 cars and a house... KWIM?

[Palooka]

Is $1000 enough for the EF these days? We're finding more and more that emergencies are exceeding $1000. With the cost of everything going up, we're thinking of increasing our EF to $2000. Any thoughts?

I never thought it was, but it is a good start.

For some people saving just 1k is huge.

Then there will be people that want you to 'define' and emergency but that is really personal and depends on so much. It's not black and white for anyone.

[ladykemma2]

if you watch people on here who keep getting knocked to the curb every time something comes up and until they have perfected their budget, I think 1000 is not enough. it takes a while to get everything on a budget, especially those things you don't think about like vet bills.

if i had to do it over again i would do 5000 for a BEF.

mary hunt advises differently. she advises getting your 10,000 contingency fund togther as soon as possible, then attacking debt.

[Greebo]

Well this is the DR subforum, so I'll give his answer:

No, $1,000 isn't a lot. The goal of the $1,000 EF is to let you handle most minor emergencies without having to go back into debt, but at the same time to keep you uncomfortable enough that you get extremely intense about eliminating your debt in baby step two.

DR used to not have a BEF in his plan at all - but then someone would blow a tire and boom, out had to come the Credit Card.

[Russ]

mary hunt advises differently. she advises getting your 10,000 contingency fund togther as soon as possible, then attacking debt.

The wife and I were well on our way to having 10K in savings, but I noticed something as we hit $7500-8000. It became easier to dip into savings because we had so much in there.

Well this is the DR subforum, so I'll give his answer:

No, $1,000 isn't a lot. The goal of the $1,000 EF is to let you handle most minor emergencies without having to go back into debt, but at the same time to keep you uncomfortable enough that you get extremely intense about eliminating your debt in baby step two.

DR used to not have a BEF in his plan at all - but then someone would blow a tire and boom, out had to come the Credit Card.

The key words are in bold IMO.
Major emergencies:
furnace going out
totaled car and you have no other
In other words large ticket items.

You have to define, per individual, what you consider an emergency. Seems to me the Mary Hunt program takes in to consideration a job loss, were the DR plan does not as far as emergencies funds go.

[ladykemma2]

The wife and I were well on our way to having 10K in savings, but I noticed something as we hit $7500-8000. It became easier to dip into savings because we had so much in there.

yeah i did this for a while too, but then incorporated dave ramsey's idea of insurance. it's insurance and therefore sacrosanct.

[bumplett]

I agree. $1000 isn't enough for most emergencies.

[TheRootedNomad]

We found the same thing as rcannon when we got to step three. We were finding it easy to dip into it at about the same $7500/$8000 mark. The "uncomfortable psychology" really does work with getting the debt paid off. When we only had the baby EF it was really motivating to make us want to get the debt paid and get back to beefing up our savings.

I do think you need to take into consideration, as Dave says, whether you have real storm clouds on your personal horizon.

To back track to the dipping in though, we found that when this started happening if we moved some of our EF to laddered CDs (6 month rotation of mortgage payments) it didn't look like we had as much in there and we were less tempted to dip.

[kcsmom76]

Well I am/was a die hard Dave Ramsey fan until mine and dh's world fell apart 3 months ago. We were working the steps and something would come up and the Ef would be gone, but dh had a job and we always replaced it before Murphy came again. That is, as I said before, until three months ago.

Is $1,000.00 enough?????????

We were sailing along and almost non-mortgage debt free. When summer came I quit my job to stay home with the kids. I was only making minimum wage and hated my job and stayed sick. It was only to be temporary until I could find another job. But that never happened. So with the cost of daycare it was a wash. Then our computer went kaput and we put one on the cc card so as not to be inconvenienced. LOL The pool pump was giving us a fit in this time too. We paid cash for it but it came from the EF. We replaced the money. Then I had to have a laproscopy. Then a month later I had to have a hysterectomy.

Is $1,000.00 enough?????????

Then the worse hit to our finances happened on Oct. 20, 2009. My dh stood up from the computer desk and felt a pop. Then his knee gave out on him. I thought he will be out of work for a week or two tops. Turns out he needs a total knee replacement and is only 39. The doc doesn't want to do it until dh is at least 50. Dh's job consists of getting up and down off a jack all day and the pounding on his knee would be unbearable.

Is $1,000.00 enough?????????

As things are right now, his employer is not allowing him to cone back to work without any restrictions. That is impossible. He asked for another job and since the economy is so bad they are not hiring or transferring anyone. Dh has no job. I have no job. I am desperately searching for something and there is NOTHING to be had.

Is $1,000.00 enough?????????

Dh gets disability, but only 1/3 of what he was bringing home. On his job he had a base hourly pay and then got paid bonuses. He made lots of money in bonus every week that isn't added into the disability checks. The checks are hard to come by since we have to fight the doc office, insurance company, and dh's employer to stay on task to get us our money. We have gone 3 weeks one time and four weeks this last time waiting on money from them because they drag their feet.

Is $1,000.00 enough?????????

We have lived in our home almost 13 years and paid our house payment on time except once when dh put the mail between the seat and forgot to mail it. And we are looking at losing our home because of the bad economy and our luck.

Is $1,000.00 enough?????????

Sorry for the novel, but $1,000.00 was enough for awhile and then when Murphy came it was not enough. If you feel you need more than $1,000.00 I would go for it no matter what an guru said that you needed. Times are rough right now. And that is putting it lightly.

No one else should tell you how much money you need. All I can say is even if we would of had $10,000 saved it would NOT have been enough for whatever our future holds and we are almost debt free. All we have is $2,500.00 in non-mortgage debt and in the grand scheme of things that is nothing.

[frugalwarrior2]

$1000. has not been enough for us this last year. We have teens,lots of pets,2 cars and an older house (1972). If I lived in an apt. alone $1000. may have been enough but not w/ 4 people. DR is too simplistic for our family. We have too many variables. I have a goal of $2500. this year. We had $1500. but I already dipped into it once for stockpiling.

I don't have the confidence to ride on $1000. while I pay this much debt,while funding college. It is too long term because of our debt. I think DR was a guideline to get out of control finances in some order but people have not thought for themselves and tailored it to their circumstances. They'd rather have someone to blame. Not thinking for themselves or thinking things out got them into this originally. The "it'll be o.k. syndrome???

Please realize I am not absolving myself. I am guilty of this mental skating too. Life overwhelmes us and we all do it.

[Siebrie]

"our computer went kaput and we put one on the cc card so as not to be inconvenienced. LOL The pool pump was giving us a fit in this time too. We paid cash for it but it came from the EF." - kcsmom76

"I already dipped into it once for stockpiling" - frugalwarrior2

But are these for the BEF? I thought that DR taught to be very intense about paying off debt? I don't want to be rude, but I think DR would have told you to do without the computer or pool for a while, or borrow, hire, etc. one.

Are pools very common where you live? Can you rent it out/ ask an entrance fee?

[ladykemma2]

"our computer went kaput and we put one on the cc card so as not to be inconvenienced. LOL The pool pump was giving us a fit in this time too. We paid cash for it but it came from the EF." - kcsmom76

"I already dipped into it once for stockpiling" - frugalwarrior2

But are these for the BEF? I thought that DR taught to be very intense about paying off debt? I don't want to be rude, but I think DR would have told you to do without the computer or pool for a while, or borrow, hire, etc. one.

Are pools very common where you live? Can you rent it out/ ask an entrance fee?

yeah i just chewed out someone on another forum for buying air freshener while on bs2. "it's on sale... "

[mombottoo]

No it's not and I never thought it was. I think a good EF should at a minimum be the equivilant of 6 months expenses...but, that's just me.