How much is your emergency fund?

posted 6 months ago in The Lounge
  • poll: How much are your liquid emergency savings
    $1000-$5,000 : (16 votes)
    18 %
    $5,000-$15,000 : (22 votes)
    25 %
    $15,000-$25,000 : (16 votes)
    18 %
    >$25,000 : (35 votes)
    39 %
  • Post # 2
    4994 posts
    Honey bee
    • Wedding: July 2018

    The actual number is irrelevant, your emergency fund should be about 3-6 months of expenses. Maybe the shorter end if you are a couple with one salary comfortably covering everything and maybe on the lower end if you work in a turbulent industry.

    Post # 3
    705 posts
    Busy bee

    6 mo expenses in liquid at any given time would be my recommendation. The long term savings rates as of right now in the US aren’t much better than short term CD or even savings account rates, so I’d recommend the latter if you’re in the US. 2% ain’t too shabby. 

    Any longer term investments with market exposure, it’s hard to say right now- we may have more corrections coming up. We opened up two long term investment accounts this year and they’ve both lost us money as of now. In the long term, we should be fine though. 

    Post # 4
    43 posts

    You need a ‘zero’ option. =(

    Post # 5
    767 posts
    Busy bee
    • Wedding: June 2019

    I could take 6 months off of work and I would still be able to pay my mortgage. I’d say at least 3 months is a good idea for anyone

    Post # 6
    310 posts
    Helper bee

    I work in wealth management and we recommend six months worth of expenses before beginning to invest. However, we also suggest putting at least the minimum your employer will match, if any, into your 401k as well. It’s different for everyone.

    Post # 7
    133 posts
    Blushing bee

    To add to the good advice above, while CDs aren’t quite liquid they can be good emergency savings vehicles. Make sure you can break the CD early (generally for a penalty). The penalty can actually be a good incentive to access that money only in an emergency, and the rates are a bit higher than liquid accounts. But if you have good self control, then a high-interest savings account or a money market account can be fine for emergency funds. (Choose a money market account from some place like Vanguard, not your bank. Bank money market funds typically have very low interest.) Vanguard prime money market is currently yielding not much less than a good five-year CD.

    Post # 8
    24 posts

    It was 6 months of expenses, but then we bought a house, so I’d be happy if we have 1-2K left over after closing. Our mortgage will be lower than our rent through, so we should be able to replenish  relatively quickly.

    Post # 9
    732 posts
    Busy bee
    • Wedding: October 2019

    adastra :  I agree with all your points. To add to it, online savings account offered by credit card companies such as Discover and Amex provide around the same interest or more than most CDs do. 

    onepeople101 :  I strive to have 6 months’ living expenses in a savings account. I also do the minimum employer match on my 401k and the maximum limit in my HSA. All other savings over and above that, I am saving for future house down payment it in an online savings account at an interest rate of 2%. Once I buy a house, I will max out my 401k after which I will probably consider investing it on my own. 

    Post # 10
    100 posts
    Blushing bee
    • Wedding: June 2018

    Aprilbride2717 :  that’s the same situation I’m in! Hopefully we can recover quickly. 

    Post # 11
    2367 posts
    Buzzing bee

    My emergency fund is pathetic and this is the year that I’m working on getting it back up to spec.  

    I bought a condo, got married, honeymooned, and then 2.5 years after got divorced.  It was a huge hit on my finances. But i have a savings, my retirement is in good shape and I besides my mortgage, I have no debt, so I’ll call that a win.

    Post # 12
    1132 posts
    Bumble bee

    All of our savings are going towards buying a house. We both work in the NHS so have extremely good pensions, holiday allowances, sick pay and maternity leave etc. Our jobs are front line and very stable, there are currently massive shortages in our fields, so I have no worries of being made redundant. After we buy a house we will build our savings up again in case of repairs or problems etc. But I don’t feel the need to have 3 or 6 months wages saved due to the security provided by our jobs. 

    Post # 13
    893 posts
    Busy bee
    • Wedding: November 2014

    A word of caution to those saying they are putting the emergency fund on hold until they get a house: 

    We did that.  We bought a house, had a borderline glowing home inspection report, and spent a large portion of our savings on things we needed for the house (some unexpected).  Then we discovered we needed a new roof  to the tune of $7900 (yes, we are going after the home inspector.  No, we probably won’t get anything back).  We didn’t have quite enought in the emergency fund at the time so we had to eat some crow and humbly ask my father to lend us the money needed to repair the roof.  Thankfully this occurred before we ordered a suite of new kitchen appliances and a new bed.  

    Hopefully our tax refund will be as favorable as last year’s and will enable us to pay back my dad and pay off the credit card that is currently carrying our non-refundable summer vacation on it (trust me, if it wouldn’t lose us more money than we would save, I would have cancelled by now).  

    We, for the record, purchased a home WELL within our means (as in we could afford it on my income alone should the need arise though it certainly wouldn’t be as comfortable as it is now) and I am in a theoretically very stable position (fully credentialed teacher in a state with severe shortages).  Granted, a lot of fenderal employees impacted by the government shut down probably also thought their employment was very stable as well so…

    Post # 14
    705 posts
    Busy bee

    Anyway, my earlier point (which I guess was lost) was that at today’s rates for both market and CDs and savings, I would put ALL my money in high yield savings.

    That gives you liquidity, and a comparable rate to almost any other investment you can make right now. Today’s numbers do not justify ANYTHING else. 


    Post # 15
    13473 posts
    Honey Beekeeper
    • Wedding: November 1999

    We have six months of our salaries put away for emergencies (not straight up expenses, full salaries), which could be stretched significantly longer if one or both of us lost our jobs.  

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