Comments on: Building An Emergency Fund – Where Do I Keep It?

By: Mary H.

Mary H. — Tue, 15 Dec 2009 02:21:44 +0000

I didn’t actually count, but I think the majority of contributors keep 6 months emergency funds. Given the economy and the fact that my husband has just gotten a job after being unemployed for 9 months, we are in the process of building a 12 month emergency fund. Fortunately we had paid off our mortgage 5 months before my husband lost his job, so we managed the unemployment period without having to dip into savings. I encourage readers to lengthen their emergency fund time period from 6 to at least 9 or 12 months.

By: Jhonty Rhodes

Jhonty Rhodes — Tue, 10 Nov 2009 22:31:47 +0000

Nice article. I started thinking about emergency fund and credit card debts soon after i graduated with 40k credit card debt in 2005. Me and my wife (we both are electrical engineers) cleared the debt in 2006, paid off my car loan in 2007 and have saved about 120k in emergency fund (40 months)(in multiple cds). I have about 70k in investments (stocks, mutual funds and options) and about 25k in checking and savings accounts. The goal is to have 5 yrs of emergency fund and maintain the amount in checking and savings by the time i’m 30 next year. After that it will be the time to start saving for vacations, college education for kids (to be born) and a home (to be bought in 2012).

By: Derrick F

Derrick F — Sat, 08 Mar 2008 23:39:33 +0000

Hey,

I am working on a $12,000 emergency fund right now. It will all be kept a couple of clicks away in a Money Market account. I do carry travellers cheques when I travel which serves as an additional emergency fund. For day to day activities, I have cash on hand, but it is not really an emergency fund per se.

By: karla (threadbndr)

karla (threadbndr) — Sat, 08 Mar 2008 00:11:55 +0000

The total of my efund is about a year of take home. Yes, I’m cash heavy, but I’m single (widowed) and in an area/market where I might have trouble instantly getting another job at my current pay.

Half is in laddered CDs at my credit union, with one month in the MMkt saving account attached to my check book and four months in ING. There is some cash on hand and I budget based on last month’s wages, so most of the time, there is about a month’s worth in my interest bearing checking account.

My biggest issue with the efund is my reluctance to dip into it. I HATE it when I do. I’m trying to get around that by setting up some ‘future spending’ sub accounts in ING and funding them now that the e fund is more than flush. Probable categories are “household improvements/appliances/repairs” and “auto repair/replace”. Knowing that they are accrual accounts that are MEANT to be spent should help me actually be able to spend them.

By: KC

KC — Sat, 01 Mar 2008 15:30:30 +0000

This is basically how I do my emergency fund – just like yours in checking, Money Market (savings) and cash. My numbers are a bit smaller, but that’s cause I have abosolutely no plans to buy anything expensive in the near future (course I didn’t plan on someone totaling my husband’s car last year either, but that’s another story).

I know people highly discourage non-discretionary, non-retirement money being kept in stock, but some of my emergency fund is there, too. I figure if I have no source of income I’m not going to burn through my money market in a week. That would give me enough time to sell the securities I needed to pay the bills – this money is fairly liquid unlike equity in my home, as an example. This money is also not in speculative securities at all. If the stocks I own go bankrupt we’re all in for a world of hurt, not just me. But I certainly wouldn’t recommend keeping any emergency funds in securities unless you have thoroughly researched the companies you’re buying AND you have enough money in them to take a drop in the market like we’re experiencing now.