Question

Do you keep your 3-6 months expense savings as an Emergency Fund? Or do you have a separate emergency fund AND the 3-6 months expenses? Im wondering what to do. It’s a little overwhelming having multiple accounts to keep track of, but it’s also bothersome to combine everything and see one number when the amounts are separate. What if there’s an emergency that’s more than $1, 000? Do you use your 3-6 months expenses fund then to cover the rest? Or is the 3-6 months expenses strictly for loss of a job/income? How much should be in an Emergency Fund if it’s not the same as the expenses? Please explain lol

Answer 1

Your $1k emergency then turns into your 3-6 month emergency. You should put them together

Answer 2

I was under the impression that an EF should be worth 3-6 months of expenses. But more savings accounts never hurt :)

Comments

@dillingham9932 You are right. my hubby is more comfortable with 1 yr worth, so do what works best for you!  

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@dillingham9932 same! But I’ve seen posts saying they have $1, 000 EF and then 3-6 months savings and I’m confused!  

Answer 3

The $1000 is your EF while paying off debt. Then you start at $1000 to build up to 3-6m. You can keep them in separate accounts but emergency funds are emergency funds no matter where you put them. It is nice to have sinking funds for a purpose too. Having money set aside for car tires, home repairs, medical bills, etc keeps those things from being emergencies when they happen, then you don’t have to dip into your EF.  

Comments

@hauteur so would these all be in separate accounts? I need to see like separate labels so that my husband doesn’t dip into the wrong envelope or account for car maintenance for example lol

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All of mine are in the same savings account. Mine lets me set up goals do I can see how much I have set aside in each category.  

Answer 4

My EF is 1 yr expenses and it is in a money market so I can get to it if needed. I also have a household savings acct for things we are saving for like generator, landscaping, etc. My 3rd savings acct is for sinking funds. I add all my funds up for the yr, ex, auto ins, tag renewal, Amazon subscription, etc, and then ÷ 12 and deposit that much into acct each month. then, when that item comes due, I just transfer to checking and pay it.  

Comments

@rhapsodize oooh I like the way you do the sinking funds! I’m gonna do that. This makes more sense!  

Answer 5

Following because I’d love to know also.  

Answer 6

I have my EF with Navy Federal. $150 go to it monthly. It’s an allotment I have that automatically comes out of my check (I pull from this account first). I have additional savings accounts with USAA for $300/month, and one for $50/month with a local. credit union from when I was stationed in VA. Those are savings accounts I really don’t have a plan for per say. I think I could use it as a 6 months fund if I ever needed it. My daughter has a savings account for $150/month also.  

Answer 7

I’m sure people do different things that best suit them! So I have a 3K checking cushion that’s kind of like a first line of defense emergency fund. Then I have like 8 months salary saved. That ideally would be for loss of job; but if for some reason something catastrophic happened that the 3k plus whatever else won’t cover then I would def be open to using the long term EF. Finally I also have investments that’s for “nothing” (could be for retirement, kids college, etc) that I can also dip into it absolutely needed. I find that having these multiple things help me feel comfortable in case of an emergency

Answer 8

Do what makes the most sense to you. I have a savings account at my local bank that I consider as my EF. It has more than $1, 000 dollars because I feel more comfortable with a larger amount that I have easy access to. I also have a savings account with Ally Bank. This account has my sinking funds in “buckets” and the core savings would be used if I lost my job or needed more money than my EF has.  

Answer 9

I have 1500 in an emergency fund attached to my checking account for emergencies that I don’t see coming, like I’m traveling and my tires blow out and I need them NOW. I keep my other saving that I’m aiming for 6 months living expenses in a high interest saving account at another bank but it takes 3 days for transfers to process so it’s an emergency fund but not for immediate emergencies, but for things like a lay off or surgery where I can plan a little bit unavoidable type of a thing. that’s my thoughts anyway

Answer 10

I keep a $500 checking buffer, for small emergencies; and the rest in a money markrt account that I can transfer to checking within 24 hours.  

Answer 11

I have an emergency that is 4 months worth of expenses. If something happened that I didn't have money for, I would dip into that emergency savings. But I also have different sinking funds for a variety of other goals like vacation, xmas etc

Answer 12

We have separate accounts. I have a traditional savings account that holds our emergency fund and a separate high yield savings account that holds our savings for 6-7 months expenses that we don’t touch. We typically have a little more than $1k in the savings but if we ever have an emergency that we can’t cover right away, we can pull from the other account if needed. It will take a couple days to get the cash but most things like unexpected medical bills have a month or two. The savings account is way more easily accessible and we made it so the 6 months savings is more of a pain to get to so we’re never tempted to take money from there. It’s literally out of sight and out of mind to us now.  

Answer 13

My emergency fund is my multi-month living expenses fund.  

Answer 14

So. we’re still working on our years worth of salary. That’s our ultimate savings. One year of his salary. That’s in a checking out at a credit union we don’t use often, and it’s not close by. Our emergency savings, is at a local credit union. That’s 6 months of expenses. Our checking account with our 1k buffer, is at another local bank. We’ve been victims of identity theft, so we have money at difference banks. And they each serve a purpose. If we have an emergency, it comes out of the account that holds six months of expenses. Anything that’s beyond that, would come out of the one year of salary. It gives us a safety net. We decided to split it up to help us reach our goals. Also, the bank with the largest savings, closed all their branches in our state, so we switched to a local bank for our everyday needs. When they came back, we just used them for savings since we already had an account with them. One of our local credit unions was offering some killer interest rates, so we opened an account with them for our short term emergency money. It sounds complicated, but it works for us. ‍♀️

Answer 15

I have two accounts. I think of my EF as my “when something short term but expected happens” and my 3-6 months as “if I lose my job or need extended time off, etc. ”

Answer 16

The 3-6 months is your emergency fund. The only other savings you should have outside of that is sinking funds, retirement, and kids college savings.  

Answer 17

I’m keeping my current account at £1000 buffer and then saving 3 months wages separate  

Answer 18

I keep them separate but only because of how my accounts are set up. I live on an island with no national banks, so I have a local bank with my $1000 in savings where I can quickly withdraw or transfer to checking if needed. Then my 6 month fund is in Capitol 1 high interest savings. Once I’m back on the mainland it’ll all be in Cap 1, because I consider it all an EF.  

Answer 19

I have $1500 cash as my starter EF now. Once my last debt is paid I’ll start building that up to 1 year of comfortable expenses. The $1500 cash will be my first line of defense. I also keep sinking funds for the vet, my HSA, and car maintenance. I do keep a separate little savings ($2000 goal) for purchases that may come up that aren’t planned. My printer breaks, a quick weekend of wine tasting, etc.  

Answer 20

We opt to have both. They’re in separate accounts only because my husband has our 1k EF in his savings and I have our sinking funds account which will also house our 3-6 month EF since it’s high yield. The way we see it, it works in layers. if we have say a car repair that’s more than our maintenance fund, we’ll tap into our checking account cushion and EF. If we have several emergencies or something that has depleted their allocated savings, our 1k EF, and our checking account cushion, then we’d break into our 6 month EF. We’re trying to keep our 6 month EF as solely for the event of job loss or other loss of income

Answer 21

I have two separate accounts. One is my $1000 EF, which I’m hoping to increase over time. The second is going to be a 3-6 month of expenses. We’re currently working on the second account. EF is for emergencies that come up. Expenses is for loss of a job.  

Answer 22

I have it together.  

Answer 23

Both. I transfer money each pay period to both accounts. Started with a chunk for the emergency fund 1st and continued to add to it

Answer 24

I see the 3-6 months of expenses and emergency fund as the same thing. I'm an old Dave Ramsey follower (converted to TBM back in October), and that's how he always presented it once you pay off your debt, you pump up the emergency fund to 3-6 months of expenses. You have to decide what the appropriate amount is for that savings.