Comments on: Is Your Emergency Fund Big Enough?

By: Vas

Vas — Tue, 13 Oct 2009 11:54:41 +0000

A percentage of your income should be put into your emergency fund lets say 10% or whatever is reasonable. In my view it should be more than what you expect you will need if an emergency arises. In the end whatever is not used will be your savings.

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Carnival of Debt Reduction: | Clearchoicecreditcards — Mon, 05 Oct 2009 07:11:04 +0000

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Sat, 03 Oct 2009 13:52:34 +0000

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By: John DeFlumeri Jr

John DeFlumeri Jr — Thu, 01 Oct 2009 01:34:59 +0000

Make sure the emergencies are small enough, that’s a good idea too!

By: PT

PT — Wed, 30 Sep 2009 20:51:04 +0000

Good point, Jen. 3-6 may not be enough for those in high unemployment areas, or for those in certain industries right now. Do you think you’d be open to a move or career change if things don’t improve?

By: Jen@Balancing Beauty and Bedlam

Jen@Balancing Beauty and Bedlam — Wed, 30 Sep 2009 20:24:32 +0000

In this economy, I think people are finding that 3-6 months is not enough. I am thrilled that we have been slowly building our emergency fund and at the present time, we’ve endured the first eight months of unemployment and are still debt free (besides the house). Has it been a character building opportunity for us? Absolutely! But has it devastated us? Thankfully, with years of living under our means and getting prepared for this very time, no.

Now ask me in a few more months if our situation hasn’t changed…
I see the light at the end of the tunnel, I hope.

By: Jason @ MyMoneyMinute

Jason @ MyMoneyMinute — Wed, 30 Sep 2009 16:54:34 +0000

There are many ways to calculate your emergency fund. Do you take the average expenses over a certain number of months? Or, knowing a financial crisis will curb discretionary spending, do you calculate 3-6 months worth of minimal expenses (mandatory monthly expenses, food, utilities)? Are student loans calculated into the decision if you can have them deferred? Should any unemployment checks factor into your decision?

The more “factors” you decide to apply to decrease your necessary monthly expenses, the longer of a term I think you’d need as an Emergency Fund. If you take little to none of the “factors” (as in your example of taking all expenses each month), then I would lean towards the lighter end of the 3-6 months.

Great topic, PT. It provides lots of food-for-thought that’s relevant in our financial lives.