+6 votes
by (7.4k points)
This might be a dumb question but what's the difference between a savings and an EF? I feel like they are the same. I personally don't think $1, 000 EF is a lot for an emergency either. Am I missing something?  
This might be a dumb question but what's the difference between a savings and an EF?

6 Answers

+8 votes
by (9.2k points)
 
Best answer
EF is for whatever comes up that is an unexpected blow to your budget- the washer died, your tire needed replacing because you ran over something. Savings are for planned expenditures- like knowing that you tires have 1/4 life left on them and you’ll need to replace them in the next year (insert timeframe), so you save for the tires ahead of time instead of relying on credit to pay them.  
+8 votes
by (1.9k points)
That’s just the minimum for an EF
+2 votes
by (1.2k points)
Savings have a specific goal- depending on your own personal goals, are you saving for a house, vacations, college for your kids? Those are your savings. The emergency fund is just for that. And yes you may need more than $1000.  
+9 votes
by (4.1k points)
Fully funded EF is 3-6 months expenses. But $1000 will offset most things that pop up for a start
+6 votes
by (16.5k points)
Remember the $1k thing started with Dave Ramsey’s plan just to get those with nothing a cushion. It is a baby step. True EF is 3-6 months of expenses.  
+7 votes
by (7.4k points)
Thanks everyone! New to the budgeting world and it made no sense. Thanks for the help!  
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