What do you use EF for?
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What do you use EF for?
| Thu, 10-06-2005 - 1:11am |
Hi, Danni and everyone. I have a question on the emergency fund. I have set up the fund at credit union. $200/month.(soon to be increased). What is the amount for the year that should be in there and what is it supposed to be used for? I started out good, then flamed out. Why? All of my huge medical bills have wiped it out. I read somewhere that your EF should be 3-6 months of take-home pay, in case you get injured, cant work, cant make house payments, etc. What is everyone's goals for ER fund? $1000/yr? $5,000/yr? Thanks. Whiz.

well, my first goal is to have an emergency fund (blush)! i am looking to just get 500 dollars together first. Then i will attack my debt with a huge avalanche of snowballs. Once that is cleared, I want a "proper" emergency fund, which in my eyes is a 3-6 month of expenses plan. I think it depends on what makes you feel safe or covered.
kel
My first intro to EFs came when reading Dave Ramsey..so my plan is kinda his.
I dont have one right now...it will actually be Nov. 1 that I have a balanced budget (at last!!) and then getting a $1000 EF is goal 1. for me, with all my expenses lowered as they will be at that time...$1000 would be about 6 weeks of expenses...enough if i got laid off to find me a J O B somewhere, doing SOMETHING. or for FEMA to kick in. or in the case of medical disaster...to....i dunno...move back in with mom & dad?
annywhoo...once my debt is paid off, which will be about 3 years.. (I dont own a home, so not including a mortgage), I would want to increase my EF to 6 months, for me. *I* want that higher safety net because that's how I got IN this mess to begin with. Being out of work for a year and running up CCs knowing I could pay them off "when I was working" Although I cant see myself Ever doing that again, I want that net.
Dave Ramsey suggests 3 to 6 months, depending on your personal situation. Figure in everything from job security to health to the situation that got you here the first time, I guess.
On the one hand, you don't want to neglect putting your money into a higher interest rate location then your EF is...but on the other hand...I don't figure you can have TOO much in your EF....and at least now with SOoo many banks out there you can find savings accounts with decent interest rates.
~ Teresa
Teresa
http://www.affordingpickles.blogspot.com
Hey Whiz - while my ultimate goal is to have an e-fund that is 3 to 6 months of monthly expenses, I'm not going to attempt that until I am cc debt-free.
All my best,
Danni
My initial goal is to have $1000 and once that is in place to build up to 3 months salary.