Let’s Talk Emergency Fund

EMERGENCY FUND-5

Emergency funds are in the event of a financial emergency: unemployment/job loss, medical bills, car repairs, anything unexpected in your life that will cost you money. There are mixed opinions on what is considered an ‘acceptable’ amount, and really, there is no set amount. It depends on how much you’re making and what your lifestyle is. A person making $100,000 is going to have a totally different emergency fund than someone making $35,000.

Financial gurus Suze Orman and Dave Ramsey (who I both admire) have two very different ideas of how much emergency fund should be. Dave Ramsey says that a full emergency fund should cover 3-6 months of expenses, but it’s good to start off with at least $1000. Suze Orman says an emergency fund should be 8 months.

Work your way up. A little can go a long way. And it can will take a while to build an emergency fund up. Don’t be discouraged if your emergency fund is not as significant as you’d like. The ultimate goal should be about 8 months worth of living expenses. I suggest using a separate account from other savings. The money that goes into this account should only be for your emergency fund. There are multiple things that many of us are working towards saving. Some of us are saving towards the down payment of a house, some of us are saving towards purchasing a car, going to school, traveling, I could go on and on –So, it is okay if your emergency fund is not where you want it to be, just make sure that you are working towards building it! And remember! As life happens, the emergency fund will fluctuate because you’ll be using it for its purpose.

Do you have an emergency fund? Comment below about how you built it!

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21 thoughts on “Let’s Talk Emergency Fund

  1. Stephanie Cox says:

    Our emergency fund grows monthly. My husband gets bonuses and we divide the bonus in half and it gets put into our do not touch unless shit hits the fan fund. On average, we add $500-$750 a month. We’ve been doing this for nearly 2 years. It’s to be used only in an emergency. So far we haven’t had to touch it and that makes me happy.

  2. Logan Can says:

    We are still working on getting our emergency fund up to that. We do put some back every month and have included that as part of our budget. It is so so important because you never know what life is going to throw you.

  3. nickirocky says:

    Definitely important. We squirrel away a little each month. Like Stephanie it makes me happy that it is in tact! In this economic climate anything can happen so every time a little more money frees up (a bill is less than we thought, a bonus is given or a loan paid off) we add the amount to our savings before we get used to having it!

  4. Brooke Ellen says:

    I don’t have an emergency fund… yet! I think it is something that many people should consider in this day and age! So I am going to get mine all setup soon! And this post is so good and should be shared!

    xoxo
    Brooke

    inaworldofbees.com

  5. GiselleR says:

    I don’t have an emergency fund but it;s definitely something I need to start. Right now, all my savings goes into one account, but separating it is a great idea.
    Thanks!

  6. Trish (@KhakiPantsBlog) says:

    Having an emergency fund is so important. We have one and are continually saving in it. We didn’t have one while I was in grad school though (to keep student loans minimal) and it was a little scary, we would have been screwed had something happened!

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