Question

The Budget Mom goals really got me thinking about emergency funds. How are people determining there 3-6 month EF amount after paying off debt? Are you trying to save enough to have 3-6 months of your full pay checks or just expenses. If it is expenses which expenses, are you talking bare bones or even “frivolous” expenses like eating out? I know this is very personal, but I’m just not sure what amount makes sense and wonder what other people are thinking?  

Answer 1

Good question. I'll follow for responses

Answer 2

I set it up as all your monthly bills/variable expenses times how ever many months you want to save for. This money would just come from all the payments I would make monthly on my credit cards. As if I’m still paying them BUT it will be going to the emergency fund instead. Or whatever is left from cash envelopes will be rolled over to the emergency fund .  

Answer 3

Right now we are doing the bare 1000. But after debts paid off we are saving 1500 for each member in the family. So we will have an ef of 6000+

Answer 4

Being a dual income family, I don’t feel a need to have 3-6 months of expenses or income saved up. Instead we have 3 months of mortgage payments saved. We will eventually get to 6 months, but after we buffer our checking account a month, and save another $3k for “short term emergencies” such as medical, auto insurance deductibles, emergency travels etc.  

Answer 5

When we get there we will do 6m of normal expenses. If we ever need to use it we will evaluate then if we need to cut from those expenses to make the money last longer.  

Answer 6

We have 6 months of our normal expenses, or what we normally send according to our budget. We chose to also retain our baby emergency fund of 1K. If we were to lose our income, we'd have a buffer of approx 6 months to maintain our current lifestyle while we recoup or try to find other income. Of course, in a real emergency, we wouldnt be maintaining our current lifestyle -- we'd go into stork mode and scale down to a bare bones budget.  

Answer 7

I first plan to save for the necessities (rent, electricity, basic groceries, things truly truly needed). When I have that covered for 6 months then I'll add in the extras (eating out, subscriptions, etc) and continue the regular monthly amounts. I figure, if needed, if rather have 6 months of the necessities covered than say 4 months of our regular bills. You never know when something may happen and I'd rather cover the largest time frame possible if my cushion isn't quite there yet. Does that make sense?  

Answer 8

I have my 6 months expense. We only did all four walls, shelter (mortgage and utilities), gas, groceries and clothing.  

Answer 9

I want to save 3 months of bills, including minimum debt payments and childcare, variable expenses like food, dog, kid envelopes.  

Answer 10

I’m saving 3 months of my normal expense for my Bs3 fund. Realistically, if I couldn’t work due to sickness or injury, I would be covered either by the government (I’m not in USA) or my life insurance. So for me, my EF will be more for a large unexpected expense rather than if I can’t work.  

Answer 11

I didn't do the math to know just bills + variable expenses. I picked 20K as our #. I'm sure it will need to increase but for know that's the # I picked.  

Comments

@invert3323 same!  

Answer 12

I would save 3-6 months frivolous but then make sure I was living bare bones to ensure maybe I would have a little more then 3-6 months to live on for worst case scenario

Answer 13

We follow Dave Ramsey as well. He recommends bare bones- your normal bills/expenses will be able to be paid. (If a layoff happens, Kids may have to give up whatever activity they're in, no vacations, stop sinking funds etc ) And if you're a single or irregular income family, then try save up to the six months. Otherwise, a three month cushion is ok.  

Answer 14

Bare bones. If I'm in an emergency situation, I wouldn't be able to do the extras. I can't imagine buying frivolous things if I don't have a job or know when one's coming.  

Answer 15

To me, 3-6 months emergency fund equals: if i lost my job tomorrow, what would I need to sustain myself until i found another.  

Answer 16

My goal is to have 6 mo of my current monthly salary

Answer 17

Great question!  

Answer 18

When I get to that point, will match income

Answer 19

6 months and no frivolous spending if no job! Just my opinion but what would anyone just want to waste money away when you don’t have an income coming in.  

Answer 20

We do essentials and 4 months.  

Answer 21

For me, it is “bare bones” funding.  

Answer 22

Just the main bills like rent / mortgage, grocery budget, electric and phone.  

Answer 23

3-6 mos of household expenses.  

Answer 24

I’ve been wondering this too, thanks for asking!  

Answer 25

For me I first want enough for 6 months of expenses then work that up to 6 months of income.  

Answer 26

We do 6 months of my husbands salary

Answer 27

A couple of people touched on something I want to articulate. This kind of “what if I lost my job” emergency fund planning should take into account how long it would take for you to find another job. That’s going to vary by industry, region, state of the economy, hiring cycles, etc. For instance, because of how niche my work is, and the hiring cycles in academia, 3 or even 6 months’ expenses would not likely cover me. During the Great Recession, unemployment periods of 9-12+ months were all too common. Of course, beggars can’t be choosers, so maybe you’d get a filler job before landing something akin to the job you lost, but you may still experience a major drop in income. I think it’s just something to consider. Make sure 3-6 months realistically covers you given your career and personal situation since those are kind of arbitrary numbers just like the standard $1, 000 EF.  

Comments

@childbed love this. Ours is 9-12 months because I am an independent contractor and varying income.  

Answer 28

Basically, if shit hits the fan what do I need to have to survive?  

Answer 29

We do expenses including groceries and gas. Ideally, we will have 6 months of income in savings but that will probably not happen for awhile!  

Answer 30

100% nope. 3-6 months is if you go into “emergency mode” and you save exactly what you need to get by, and then maybe a little extra. No eating out, no nails, no extras.  

Answer 31

6 months of our combined take home salary