What's in your emergency fund?

**Ivonna** · 03-14-2009, 07:46 PM

We are following the DR plan and have been doing an emergency fund of $1000. We are finding though, that it usually doesn't cover the emergency and I'm trying to figure out what a good amount is. For example, my van just went in to get fixed and was originally going to cost $1000. I saved that back from our tax return but my mechanic found two other things wrong with it. If it wouldn't have been tax time, there's no way we could cover it.

So, what do you have for a BEF (we still have debt) and do you base it off of your income at all?

Thanks.
Ivonna

**dcompton** · 03-14-2009, 08:36 PM

I have no debt at this point, so my situation is a little different. I keep $1000 in a quickly accessible local savings account for emergencies like repairs and for irregularly recurring expenses like insurance. However, I have been working on the bigger long term emergency fund. From my signature you can see I have 7.44 months expenses. I do base that on ordinary expenses, not take home pay. If my emergencies exceed the $1000 I can draw on that, though of course I would prefer not to. Actually, I would prefer not to have emergencies at all!

I would say that even if you are paying off debt, if you are finding that the $1000 is not enough, it might be good increase it at least a little, and certainly if you anticipate substantial expenses waiting to happen, like your van repair or a major appliance on its last gasp.

**changed4life** · 03-14-2009, 09:33 PM

I know it's hard for some families to save even a thousand dollars, however, I really don't think that's enough. Sometimes, one emergency can eat up that money. I don't feel secure unless there's at least $10G in that account, but that's me; I have a huge security gland.

**hollyhill** · 03-14-2009, 10:38 PM

Welll.... I only have 168.53 cents in my emergency acount... Ive had a series of big car repairs, computor problems etc the list just goes on... so I am starting all over again.

**Wendy99** · 03-14-2009, 11:03 PM

You have to do whats right for you and what goes with your income and living expenses.. currently we have $750, aiming for $1000 .. we'll never have $10,000, but i agree i would feel secure at that amount without a doubt. After it hits $1000 we'll keep at it ... at some point we'll have enough to feel safe. Ideally I'd like to have $2000 as our BEF, but thats a lot for us. We'll do it as we can. I remember the days before we had the EF .. and I have to say that our little $750 makes me feel good when I think back to having nothing.

**forHISglory** · 03-14-2009, 11:15 PM

I hesitate to answer this question because I don't want to appear as if I have it made. But we don't use an emergency fund any more.

Keep in mind that Hubby is 60 and retired and I am within days of being 60, and am retired, and that we both work part time jobs. Also keep in mind that when we were much younger, we DID keep that emergency fund, and there were times it was very hard to come by. I remember being so proud when we finally had $300 in it!!

But we have reached the point now where our investments and savings are available to us when we have a need. Some would cost us a penalty to tap, and others do not. And I'm proud to say that only once in the 3 years that Hubby has been retired, have we needed to withdraw some of that money! Whew!

So I'm not writing to brag, but rather to encourage you to not give up, and to definitely keep your fund as large as you can. When those emergencies happen (and they will), your fund will be much cheaper to tap than a bank loan. If you are young, it may seem impossible to build the fund. But believe me, the years go quickly, and the fund will grow. My best to you all, and keep on saving!

**Lady_V** · 03-14-2009, 11:20 PM

We have actually broken it down to a few levels...

BEF - $1000

6 month fund is our next goal - we just had to get the car repaired, so we slid some of the money back to the BEF. We won't reach it anytime soon, but we are still working on it...

Just having ANY money set aside settles my mind.

**Natalie** · 03-15-2009, 08:56 AM

That's how I'm looking at my EF. I'm aiming for $10,000 for now. When that gets closer, I'll up it. I've got a car repair coming up that'll take half of what's in there... That is, I've got the expense covered in my EF (although it's at various locations, what I need is more handy), but I'd prefer to use as much $$ that's not in my EF as possible; okay, that's not much, so I'll have to take most of the expense from my EF, and rebuild it.

Originally Posted by forHISglory

I hesitate to answer this question because I don't want to appear as if I have it made. But we don't use an emergency fund any more.

Keep in mind that Hubby is 60 and retired and I am within days of being 60, and am retired, and that we both work part time jobs. Also keep in mind that when we were much younger, we DID keep that emergency fund, and there were times it was very hard to come by. I remember being so proud when we finally had $300 in it!!

But we have reached the point now where our investments and savings are available to us when we have a need. Some would cost us a penalty to tap, and others do not. And I'm proud to say that only once in the 3 years that Hubby has been retired, have we needed to withdraw some of that money! Whew!

So I'm not writing to brag, but rather to encourage you to not give up, and to definitely keep your fund as large as you can. When those emergencies happen (and they will), your fund will be much cheaper to tap than a bank loan. If you are young, it may seem impossible to build the fund. But believe me, the years go quickly, and the fund will grow. My best to you all, and keep on saving!

**Gardengal18** · 03-15-2009, 09:11 AM

$2,000 in the Emergency Fund and 1 years worth of living expenses in the other Fund.

**TheRootedNomad** · 03-15-2009, 09:59 AM

We follow a modified version of the DR plan as well. We actually stayed around $500 to $750 for our BEF while we paid off debt. It was our motivation to get it paid off fast before anything big came down. After the debt we started building our EF. Currently there is 5 months of living expenses in it. We are both employeed though and bring home roughly the same amount so if something happened to either one of our jobs it would carry us for pretty close to a year as long as the other one was still working.

**Grainlady** · 03-15-2009, 11:48 AM

I fund what we call the Christmas/Emergency account by saving my dollar bills (which has always been at least $600 and as much as $1,000 for the year). I also budget $20/month and pay myself to cut my OWN hair, so that's another $240 I add to that account. We also walk the ditches near where hubby works and collect aluminum cans (unfortunately the price for them has fallen - but the exercise is still good and it gets some trash out of the ditches). But our can money also went in this account. Any "found" money gets tossed into the emergency fund. Found money is money from a rebate, proceeds from a garage sale, etc....

Every year we don't use this money, it's placed in a higher-earning account and we start all over again each year. This is how we've funded our larger emergency fund.

**frugalbabe** · 03-15-2009, 12:33 PM

I don't think there is a one size fits all amount. If it was just dh and I, I would have no problem with $1,000 while we were paying down debt. However, we have four young children and that alone puts us in a pretty high risk category of having Murphy come visit. With that in mind I have $2,000 in our BEF and will be working toward $10,000 once the vehicles are paid off and we move to step 3. I think it really depends on what your familys situation and your personal comfort level.

**Marie78** · 03-15-2009, 01:01 PM

Our BEF started out at $500 and then up to $1,000. We kept adding to it for the last several months and we save as much as we can. We are currently debt free and much closer to our $10,000 EF then I ever thought imaginable. I can remember a time when I only had $5 in my savings account (just enough to keep it open). Of course that was right after college when the bills just kept pouring in with no end in sight. We are at a point now where we are in good shape...now the challenge is to somehow stay here!

**Ivonna** · 03-16-2009, 11:31 AM

Thank you everyone for your replies! We are a family of four living off of one income. That income is secure so no concerns about lay offs. I think maybe I'll bump it up to $1500 and see if that will help.

My biggest concern beyond emergencies like car repairs is cc's. I have read all the stories of them raising minimums, etc. If they did that to us, we would sink almost instantly. We are working on paying off three cc's. I don't want to go extreme on my BEF because I want to get this debt paid off!

Ivonna

**frugalbabe** · 03-16-2009, 11:54 AM

Sounds like you have a good plan that is a right for you. I think that's the trick to all of this budgeting/financial managing madness. Find what works for you there is no "perfect" plan or guru out there.