Do You Have An "Emergency Fund?"

Natebonebusta

Eight Pointer
I think 3 months is appropriate in our situation with stable employment. Makes me sleep better at night knowing it's there. It's sure saved us a few times, and it also gives us a little "screw you" money if we'd like to transition into another career. Build it up over the 3 months, and I'd consider it a "freedom fund."

Say you wanted to go on a once in a lifetime vacation for a month, and your job says "NO", then you have the power to say, I'll take it without pay. Now they may choose to terminate you, but that depends on how much of a value you are to the company. Likely it's a bargaining chip for such occasions.
 

brownisdown

Twelve Pointer
Contributor
Yes, not as much as i normally would with building the house but building it back up now.

Sent from my SM-G955U using Tapatalk
 

lasttombstone

Kinder, Gentler LTS
Follow up for the guys with big liquid savings. Where do you keep it, and what kind of interest is it earning?

Mine doesn't earn any interest and I"m OK with that at the current rates. Mine is in numerous, hermetically sealed Mason jars under numerous large rocks scattered throughout 200 ac. All I need is a shovel for a withdrawal and it is accessible 24/7 for when those "super deals" crop up.
 

np307

Ten Pointer
Wife and I are in the process of building one. We were pretty much paycheck to paycheck the first 2 years due to her being in school still. Now that we're both working, it's a lot easier to build up savings (even though I'm pursuing my master's). Current goal is 3 months and we will build from there.
 

roundball

Old Mossy Horns
Contributor
Mine doesn't earn any interest and I"m OK with that at the current rates. Mine is in numerous, hermetically sealed Mason jars under numerous large rocks scattered throughout 200 ac. All I need is a shovel for a withdrawal and it is accessible 24/7 for when those "super deals" crop up.
Hope you have a list of GPS plots in your safe deposit box for your better half
:)
 
Mine doesn't earn any interest and I"m OK with that at the current rates. Mine is in numerous, hermetically sealed Mason jars under numerous large rocks scattered throughout 200 ac. All I need is a shovel for a withdrawal and it is accessible 24/7 for when those "super deals" crop up.

I've heard mayonnaise jars work better, less likely to crack.
 

QBD2

Old Mossy Horns
Leave a bill, not a will...

I hope the last check I ever write is the first one that bounces...

On a serious note, we're doing ok. I don't owe anything I can't stroke a check for. I guess that's an emergency fund?
 

lasttombstone

Kinder, Gentler LTS
Hope you have a list of GPS plots in your safe deposit box for your better half
:)

Nope. She has her own somewhere. I'm hoping I come across some of the trail cameras I've misplaced out there when i go to make a withdraw. I figure, as long as I keep putting jars out I'll be able to find a few if I need them.
 

Loganwayne

Ten Pointer
i dont have an emergency fund, but know i need one. I've been out on my own since i was 18. put myself through college twice, bought a house and have a good job that most people would kill for at 26. i was able to pay for my first trip through college with cash, second trip i had to get some student loans. currently trying to pay them down as fast as possible as well as the house. My girlfriend that we will be engaged soon has quite a bit of savings. she has lived at home no school debt, and has a good job. we have talked about using some of her savings to pay off the rest of my school loans but i dont want to use her money for that i would rather us it to buy a different house in a few years or in case of emergency. I have set some long term 8-10 year goals, its tight now on money but if i can reach my goals i should be able to surpass my current salary without doing much.
 

lasttombstone

Kinder, Gentler LTS
I misunderstood what was being discussed at first. To me, an emergency fund is for when you come across that gun you have been looking for so long.
 

Mr.Gadget

Old Mossy Horns
Nope. She has her own somewhere. I'm hoping I come across some of the trail cameras I've misplaced out there when i go to make a withdraw. I figure, as long as I keep putting jars out I'll be able to find a few if I need them.
Thatz why you have that GPS collar.... She is tracking you... wants to make sure she has location of the stash.
 

timekiller13

Old Mossy Horns
Another important aspect of an "emergency fund" is not just having cash on hand, but having assets that you can liquidate, quickly, if more cash is needed. Quickly is the key. For example, I have 100k in equity in my house, but I can't rely on that for emergency money, because, even best case scenario, it could take 30-45 days to get it sold and get the money. Cars and land are something else that can take time to get your money out of. Guns/ammo, physical precious metals are always easy to turn into cash quickly.
 

timekiller13

Old Mossy Horns
I misunderstood what was being discussed at first. To me, an emergency fund is for when you come across that gun you have been looking for so long.
I call this a "stash fund." The stash fund pays for guns, toys, hunting trips etc. Emergency fund pays for unexpected expenses (medical, dental, house or car repairs) or CYA if you or spouse loses job or can't work for whatever reason.
 

QBD2

Old Mossy Horns
Another important aspect of an "emergency fund" is not just having cash on hand, but having assets that you can liquidate, quickly, if more cash is needed. Quickly is the key. For example, I have 100k in equity in my house, but I can't rely on that for emergency money, because, even best case scenario, it could take 30-45 days to get it sold and get the money. Cars and land are something else that can take time to get your money out of. Guns/ammo, physical precious metals are always easy to turn into cash quickly.
So open a HELOC...instant access to your equity
 

23mako

Ten Pointer
Follow up for the guys with big liquid savings. Where do you keep it, and what kind of interest is it earning?

The online banks (Ally, Live Oak, just to name a few) have pretty good rates on savings accounts and CDs (if you don't mind having your money tied up for a short time period).
 

oldest school

Old Mossy Horns
Leave a bill, not a will...

I hope the last check I ever write is the first one that bounces...

On a serious note, we're doing ok. I don't owe anything I can't stroke a check for. I guess that's an emergency fund?
With your new arrival, you gonna need to go deeper on that plan.
but I'm sure you know that. If not you'll figure it out.
 

ncstatehunter

Twelve Pointer
When I was single I had more money, thenI got married and between a wife with terrible credit (she’s finally working on getting it repaired and taken the steps that it should shoot up even past mine end of Feb), a mother-in-law who screwed my wife two straight years when it came to taxes (finally got that under order) and my wife getting breast cancer at the age of 30 which destroyed her hair stylist business thanks to losing 80% of her clientele while during treatments, we were hanging on but barely. Under contract to sell our house and that equity is going to pay off debt and the rest to savings. I budget but got in a crunch being the sole person to take on anything loan or credit wise when it came to her business, granted I always pay my debts. We are lucky in that the equity we are getting from our home sale nets us a do-over. And now that she finally fully understands the financial stress she put me through (when you grow up with no regard to money like she did, you have no idea) things are looking up.
 

JONOV

Old Mossy Horns
RE The shutdown, and maybe this belongs in MB...People also like to blame the unpaid workers for a lack of financial preparedness. I don't think that's fair, either. Take someone with 2 kids, and a mortgage payment. Lets say he also has several months living expenses in an emergency fund. Now, the shutdown comes. He is forced to take a hard look at the "emergency fund." The planned to drive to Pittsburgh to visit family (fuel+wear and tear),, the travel baseball league for this son, dance class for his daughter...All that gets looked at again, and worried over.

Personally my E-fund is way down from where I want it but I'm working on bringing it back up.
 

Mr.Gadget

Old Mossy Horns
Some of Dave Ramsey's advice is just wrong. His advice of paying extra to a mortgage is harmful in this situation.
How?
I know a few investment people that told me that..
I paid extra, always paid extra on anything I owed.
Alway come out ahead and better of.
 

KTMan

Twelve Pointer
Contributor
Yes. Have a strong short term emergency fund (2-3 years). And hopefully have a good 30 year fund built up because I plan to retire in less than 5.

Not a big fan of Ramsey. Lot of advice he gives is probably not the best. Our church really really pushes Ramsey and we attended the program. Didn't feel I walked away with anything. But I do see why churches push it so much and Ramsey was smart to push his program thru the church.
 

Sp8

Ten Pointer
me and my wife keep a months worth to the side for just in case plus we have a savings and money market. You never know what my happen.
 

Mr.Gadget

Old Mossy Horns
BTW don't forget the rest of your E Fund..
Food. Want to have extra food also, if you do not that money you have for paying bills could be used up in food in short order if you do not keep a stash of food with your cash or other savings.
 

Homebrewale

Old Mossy Horns
How?
I know a few investment people that told me that..
I paid extra, always paid extra on anything I owed.
Alway come out ahead and better of.

In simple terms, the mortgage company doesn't care how much you've prepaid the mortgage if you don't have enough to pay the next mortgage payment due to loss or furloughed job.

You will note that I said pay extra towards the mortgage. There is a big difference between paying off the mortgage completely and paying down the mortgage faster. If you had a $200,000 mortgage, were ahead on the loan by 20 years and had only $10,000 left on the loan, they'll foreclose on the house if you can't come up with the next mortgage payment.

If you really want to pay a house off early, start a mortgage freedom account at your bank or broker. Put your extra payments into the account. When the account balance equals the mortgage balance, you now can pay off your mortgage in full. Before the mortgage freedom account is large enough to pay off the house, it can be used as an emergency fund to pay for monthly mortgage payments, food, utilities and other daily living expenses until you get another job or in this case the furlough ends.

People think paying down the house is a low risk activity. It's actually high risk if you have some brief hard times (job loss, medical issues) in your life. You can lose your house at any time before the last payment is made. With a mortgage freedom account, it gives you time to get on your feet, cover more costs than just the mortgage and keep you out of foreclosure.
 

Mr.Gadget

Old Mossy Horns
I see what you are saying but along with paying down or trying to pay off early you also need to take in account we are talking about E Fund and that also something he pushed from what I remember.
In the case you starting paying off or ahead on it you dont have a E Fund that is just wrong. It is asking for trouble.

If you have a 200k house and only 10k left then they forclosed you are all kinds of screwed up and doing wrong. You E Fund or Rainy day fund should be large enought for move on easily with no worries.
 

Homebrewale

Old Mossy Horns
I see what you are saying but along with paying down or trying to pay off early you also need to take in account we are talking about E Fund and that also something he pushed from what I remember.
In the case you starting paying off or ahead on it you dont have a E Fund that is just wrong. It is asking for trouble.

Dave Ramsey is also anti-debt even if that means you don't come out ahead financially. I have a 2.625% 15 year mortgage loan. It doesn't take much at all to exceed that cost by investing. Using the historical return for the S&P 500, the worst 15 year return was -0.358%. The average return was 9.185%. I'm more than willing to risk the small chance that my return will be smaller than 2.625% for the good chance I'll come out ahead if I get anywhere need the average return of 9% for rolling 15 year periods.
https://dqydj.com/sp-500-historical-return-calculator/

Yes, past performance is not indicative of future results. And all the other warnings in small print.
 
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