How Large is Your Emergency Fund?

I’ve talked a lot in the past about emergency funds — why you should have one, how big it should be, etc. Today I thought I’d ask you guys about your emergency funds. More specifically, I’m curious how many months worth of expenses you keep on hand. Given the current state of the economy, I’m also curious to hear if any of you have had to dip into your emergency fund in recent months to get by.

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35 Responses to “How Large is Your Emergency Fund?”

  1. Anonymous

    A bit late with the answer, but I’ve got nearly 7 months of gross pay socked away, and another 12 in taxable investment accounts. Since I’m widowed, I don’t have a spouse/partner’s income to fall back on, so my efunds are on the high side.

    About 4 months in laddered CDs, about three in cash.

    Re post#5 – I split my efund and savings for future expenditures (vacation, house repairs/upgrades, car repair, insurance dedutibles). That way I don’t feel guilty spending the planned amounts – the efund remains intact. Some people can do this with spreadsheets breaking out a single account, but for me, I need the physical division between multiple accounts.

  2. Anonymous

    Have about 1 year of Living Expenses stashed away. So glad I saw this economy mess coming 4 years ago!!! I got laid off 2 months ago and have had to dip into it a bit. Thankfully Unemployment is paying All the bills except Cobra which has to come out of the EF, (but thankfully only have to pay 35% of the premium) So we are OK for a while.

    Great site BTW!

  3. Anonymous

    I’m at about 5 months right now on the way to 6. Would love to eventually have 1 year but I’ve only been out of college for a year or so. Just finished paying off all credit card debt and I’m waiting until I have 6 months to finish paying off the car. Putting about 1K a month away- I was proactive about the possibility of losing my job and got a roommate which made that possible. I have to say that finding a good roommate is a real game changer if you have the room, and if it is something you are willing to do. That’ just extra income that isn’t tied to your job.

  4. Anonymous

    It also “depends” for me as well. We have know for a while that my husband’s job is unstable. So we have been socking money away (after completely depleting our savings trying to pay down a huge debt) since January. As it stands now I have three months of mortgage payments in the bank. I am a federal employee with a stable job, so barring me punching my boss in the face (which would never happen, I love her) and getting fired, I feel I can count on my income.

    But in addition to this little contingency fund, I also have several other accounts that, while earmarked for various purposes (car, saving for a Roth IRA with Vanguard for my husband, home insurance premium) could easily be tapped in a true emergency and probably ride us out for another three months beyond the contingency fund. But as those funds are allocated differenly in my head, it is hard to think of them as fallback money. This is an interesting question.

    I’d also like to point out one interesting side effect of being a compulsive saver. My husband received word yesterday that he is being furloughed once a week to save the company money and try to head off the inevitable layoffs. I freaked slightly at the thought of the reduced income….until I remembered that I put 250 bucks a paycheck into different savings accounts above and beyond what I outlined above. If I could just find it in my heart to *stop* saving that 250, we would be able to smooth everything out. It’s an interesting quirk of the saver mindset that I hadn’t immediately hit upon that as a solution and was instead talking about picking up more hours at my part-time job.

    wow, I wrote a book, sorry!

  5. Anonymous

    Depends. What’s an emergency fund?

    We’ve got 2 months take-home pay for either of us (or 1 month for both of us) in the bank.

    Since he’s over 55, hubby could immediately tap his 401K with no penalty if he lost his job. He’d also be immediately eligible to collect his pension, though at slightly reduced benefits relative to sticking it out for another half a year (yes, really) to make full retirement.

    Rather than focus on building an emergency fund, we’ve focused on retirement savings. I figure in a real emergency we could drain the principal out of the Roths. That would give us about a year’s worth of take-home pay (for both of us). Obviously we wouldn’t do it all at once (if at all avoidable, and in most emergencies it would be), just withdraw as needed.

    So while there’d be some hard choices/setbacks, we’ve actually got a reasonably good resource base, considering. Of course, we may also be a good bit older than much of your readership.

  6. Anonymous

    I was laid off in August of 2008, and I saw it coming, so I socked away several thousand dollars. I had to live off of my emergency fund until I started my new job in March of this year. My emergency fund is now around 1.3 months, and it will be going up very slowly, if at all, because my new job barely covers my bills (it’s a 40-50% pay cut from previous positions, and the state is predicting further cuts, which means additional pay cuts; I am now a state employee).

    Even with less than $5,000 in the bank, I’m far better off than most Americans.

  7. Anonymous

    This was tough to answer, because it’s unlikely that my husband and I would lose our jobs at the same time. Do I answer based on FULL expenses, or on HALF of expenses? In either case, 6-12 months is probably closest; 6 FULL months and 12 HALF months.

    As has been stated so many times, there are no “one size fits all” answers in personal finance.

  8. Anonymous

    I have less than a month. I’m currently throwing almost all leftover money into my debt. I’m not in jeopardy of losing my job and I moved back in with my parents to get rid of my debt. I’m losing money in interest every month, so instead putting all that money in savings, I’m throwing it toward my debt (paying off the highest interest rate first). I put about $100-$150 a month into savings as a buffer, but the rest goes to pay off debt.

  9. Anonymous

    Also running low at the moment for the same reason as #2 plus not working for several months (didn’t dip into savings during that point, but also didn’t save anything). We’re currently working on laddering CDs to build it back up.

  10. Anonymous

    We have less than a month right now.

    I’ve been operating on keeping $1,000 in the account, but that isn’t working since we always get a cluster of unexpected expenses or emergencies.

    As soon as I get it to $1,000 it inevitably disappears, so my goal now is to beef it up WHILE paying off our debt.

    We have a long way to go still!

    Once our debt is paid of our monthly expenses will be much smaller than they are now.

  11. Anonymous

    @Amy:
    Well I’d say 43 months is a bit much 😛

    Personally I’d go for a 24 month max spread across CDs and Savings.

    I’d put up the next chunk in bonds and such, you know, the not-guaranteed-but-low-risk kinds.

    And it is going to be a fairly long time before I have the money or the risk capacity before I start putting it into the stocks. [Not counting the IRA and 401k.]

  12. Anonymous

    I have become a money hoarder – my husband and I have 43 months of basic expenses if we both lost our jobs. We have a condo maintenance fee, food, gas, car payment, RE taxes, and car and homeowners ins. Our mortgage is paid off and we have no CC or student loan debt; just a car payment. This figure doesn’t include any health insurance premiums we would have to pay (our company isn’t big enough to offer COBRA).
    If we both got the max unemployment (in Florida it’s $275 a week) we would have a surplus. For us, the key has been to get our monthly outlay around $1,100.
    I know this is way too much money to have in CDs and a savings account, but now I can’t shake my feeling of impending doom!!

  13. Anonymous

    I have barely over 6 months in my emergency fund but if I dug into my house downpayment fund I’d easily have over a year’s worth. Each month I’m putting money into both funds so by the time I actually have enough for a house downpayment on its own right I’ll have a full 12 month EF.

  14. Anonymous

    I have about 7 months worth (and growing). This is under the premise that if something bad happens, I will be scaling back on my unnecessary expenses. I in fact have all the “expenses to cut in case of emergency” marked out, so I wont have to grope around in the dark. Most of the cuts come from less eating out, less dining at fancy places, and cutting down on entertainment expenses.

    In addition to that I have a couple Ks in my Car and Eurotrip fund.

    I have a graded plan for what accounts to draw from at what stage.

    [Yes, I have lots of free time and I love chalking out contingency plans. Ask me about my Raptorocalypse plan.]

  15. Anonymous

    We have about 3 months right now. We just bought a house at the end of March though so we’re building it back up. Even though the down payment fund covered the 20% we needed we underestimated how much closing costs would be. Whoops! We’re aiming for 6+ months in the emergency fund.

  16. Anonymous

    The last comment is funny, I split my savings accounts for that very reason. We have emergency funds, which are really only for if we lose our jobs and for paying deductibles on home insurance or car insurance in the event of accidents. We also have a savings account called “HomeCarTripsGifts” where we save money monthly for home improvements, gifts, vacation, and car repairs. Right now we’re putting 2/3 into the emergency because we had to use some for a deductible recently, and 1/3 into ‘usable’ savings. Once it’s refilled we will put 1/3 in there and 2/3 in the usable.

  17. Anonymous

    I always have a hard time answering this question b/c the lines between what is my “Emergency Fund” and what is my “Savings” often get blurred. I only have one savings account and pretty much consider all of it my EF – I never withdrawal money from it.

    Right now I have 10 months worth of expenses saved up, but that is about to take a hit. I’m going to use some of the money to pay for a wedding and honeymoon. I hate using the money for a non-emergency, but I would rather do that than finance it.

  18. Anonymous

    Still working on our emergency fun while we get out of debt…so glad we haven’t had to dip into it yet!

    Eventually we would like to have 3 full months of expenses. Since hubby is in the army we feel like his job is fairly stable (and our healthcare is totally paid for) and 3 months will be plenty.

  19. Anonymous

    Ours is usually larger than it is currently because we’ve had to eat into it through the last six months. My husband is a car salesman and his income for the last 9 months has been roughly 1/2 to 1/3 of what we consider normal (about the average income for our state of Ohio), and I’ve lost the small part-time job that I had. We’re cutting back on everything we can, but wow is it tight. I feel bad dipping into the rainy day fund, but … it’s raining, man. Thank God we HAVE an emergency fund.

  20. Anonymous

    We contribute $600/month to our emergency fund. I haven’t had to dip into the fund yet because the emergencies we’ve had were less than $600 so we just paid it out of what was going to be moved to savings. We would like to get an 8 month fund but we might pay down our mortgage to ditch PMI after we have 5 months (a nice round number) set aside first. Then use the insurance premiums we’re no longer paying to beef up the e-fund. This will save us $120/month.

  21. Anonymous

    I think your audience might be skewed toward the savings side, Nickel.

    I’m with LRG – we hit our new, higher, post-kid emergency savings goal last year, so we’ve been spending money with what feels like (to us) wild abandon – I bought brand new running shoes yesterday for the first time in maybe 5 years? We got a new stove and this fall we’re getting new countertops and linoleum. Oh, and our first new couch *ever* last winter.

  22. Anonymous

    It’s tapped out right now due to an emergency! It will take a while to build it back up, but usually it’s only 2 mos worth of expenses. I know I should be holding closer to 6. Right now, I’d just be happy to have $1000 again.

  23. Anonymous

    I work for a defense contractor, and even though my job is secure (crosses fingers), I have about 10 months worth of expenses socked away. I used gross expenses, and didn’t factor in any cuts to discretionary costs that I would make. This would include luxuries like cable, dining out, gifts, etc. I sleep better at night, too.

  24. Anonymous

    I have enough for 1-2 months, but am building continually!

    Working toward having 6 months worth ASAP…after credit cards are totally gone.

  25. Anonymous

    Currently rebuilding my emergency fund and paying off some debt. I had to recently change jobs. I was working a commission based job until the economy turned and my pay went with it. I burned through my emergency fund and then some until I found a new salaried job. I expect to be credit card debt free in about 10 months. Probably will take a little longer to rebuild the emergency fund, but I’ll get there.

  26. Anonymous

    We will be very close to dipping this month with some car repairs (body work), hopefully we can cash flow through it. I

    f we do, it wouldn’t have anything to do with the economy, if anything we are doing our part to help the economy by buying new furniture, which will be paid when we pick it up, probably this month as well.

  27. Anonymous

    What a coincidence as I have just blogged about this issue myself. Sometimes it is not easy to pay off debt and set up an emergency fund. I guess each person has to analyse their lifestyle and incomes to figure out what is best, getting rid of debt or having savings.

  28. Anonymous

    Had to dip into it for taxes this year. I don’t do as good a job as I should in my setting aside money specifically for this purpose.

  29. Anonymous

    Digging myself out of $15k in CC debt after a job loss last summer. I’m happy that I can put $400/mo away in the fund AND pay $1100/mo down on my CC debt at the same time. My goal is to have it all paid off in 11 months.

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