BS3 Question?

[petrolhead]

When planning a goal for a 6 month FFEF should I be planning for 6 months of standard living expenses, or 6 months very basic 4 walls living expenses, as in only 6 months of essentials like food, utilities, transport, taxes and mortgage or would I add in the satellite subscription, broadband, mobile phones, gym membership etc.

I'm swaying towards just the emergency essentials as we would only touch the emergency fund in an emergency so we would cut out all the fluff anyway in that situation. I'd like to get to doing something about retirement as the company I work for wants to stop soon the company match to people who haven't been taking it yet, they will still pay it to those who have been paying in but not to those who start paying in after October. The 5% match will be sweet as I'm 29 so still plenty time to see the compound interest on it.

Just looking for peoples views on how they calculated the target for BS3

[Hurricane0884]

I would definitely do whatever makes you feel most comfortable most people tend to do the bare dones approach. I on the other hand decided to do something in between. I calculated BS3 to the bare bones approach and then added another $1000 to be on the safe side. It ended up being almost exactly between the bare bones approach and the everthing approach. So that is my BS3 goal: a $1000 more than the bare bones I guess its like a baby emergency fund within an emergency fund.

Apart from that definitely make sure you get into the company match by October. It is basically free money and it will definitely rock to see that money grow!

[MaryCarney]

I guess it depends if you have one or two wage earners. If one, you need a bigger EF, if two (and you don't work for the same company) you could get by with less.

[greekislandgirl]

The basics - if anything happens in your lives that makes you reach for the Emergency Fund, you will have already canceled your satellite, gym, eating out, etc etc. That said, make sure you still have enough to cover extras that may happen in the event of an emergency - emergency periods may cost MORE than a regular 6 month period, if the emergency involves a health crisis (health insurance doesn't usually pay for travel back and forth to hospitals, hotels for the spouse, meals eaten out while there, etc), or ...... . If you assume that the only "emergency" that can happen is that someone stops getting paid, and all other things remain equal, then you wouldn't need the extra $$, I suppose, but I can think of tons of other kinds of emergencies. It's really up to what YOU feel comfortable with.

Personally our goal is 6 months for the two of us (husband/wife) or 3 months if we have to support my in-laws as well, if we use the BARE minimum to get by, we should have another €1000 to deal with "emergency stuff" unrelated to food/4 walls.

[Greebo]

What greek said - bare necessities only. When an emergency hits, the FIRST thing you do is trim ALL the fat. You don't keep living as if nothing had changed when it has.

[jhebert121]

I am going to personally go with a full 6 months worth of net income. I am new to the forum by the way, and I am only 5 months away from being done with my debt snowball.