Author Topic: Emergency Fund?  (Read 3709 times)

jscott2135

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Emergency Fund?
« on: May 30, 2013, 08:42:14 AM »
Being new here I have no idea what the theory is n Emergency Funds.  We have 19k (3-4 months income) sitting in a money market account.  Stupid?  Smart? Thoughts?

SunshineGirl

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Re: Emergency Fund?
« Reply #1 on: May 30, 2013, 08:52:28 AM »
It depends what your comfort level is, how stable your job is, as well as what your debt obligations are, as well as your preferred "asset allocation."

To me, how many months of income isn't the point - it's how many months of expenses I can cover. My comfort level changes over time. My cash cushion isn't just (or necessarily even at all) intended for an emergency -- an "emergency" in my life would be a job loss, and I'd probably consider using it as an opportunity to pulls some money out of tax-sheltered savings while my tax rate was low rather than use cash savings first, but that's just because of my particular situation. Instead, my cash cushion is to fund shorter-term things (like 1-2 years out) and my goal with any investment I make is to keep it invested...forever.

Zaga

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Re: Emergency Fund?
« Reply #2 on: May 30, 2013, 08:53:12 AM »
Personally I'm all for having ready access to some cash.  Emergencies do happen, and sometimes you just can't control the costs as much as you'd like.

MMM doesn't see the need for an emergency fund, but he also has a large investment account and an available HELOC.  Not everyone has those things, and unless you do, then cash will help you sleep better at night.

Don't overdo it though, only you can decide what amount is "overdoing" it based on your expenses and potential emergencies.

jscott2135

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Re: Emergency Fund?
« Reply #3 on: May 30, 2013, 05:23:44 PM »
I want to thank the forum to the folks who posted.  After a heart t heat with dh this morning we figured out that we feel very very comfortable with current job. and so we loaned ourselves $12,500 to pay down the mortgage out of our emergency fund.  We will pay ourselves back using the $150/month we save in PMI and also the $500/mo we were investing in the Fidelity S&P 500 Index fund - my conservative self says we want 3 months to 4 month costs in savings.  It means that after 8 months of doing this in March of 2014 when we get our bonus we can pay ourselves back in full.  This forum just saved me $1300.  How do I even thank complete strangers for that?  You guys are amazing, I am so glad I have decided to make the jump to this forum...what an inspiration.  The $1300 you guys saved me will be put on my kids college education.  All bs aside. Seriously a few minutes of advice translated to making a difference in  kids education...if you are ever in the Portland area you are obligated to stop by the Scott household for fresh caught Salmon and local micro brew beer!!!!!!!!!!!!!!!!!!  Ohh and well duhhh you can sty over too:)  Chap vacations = Mustachian lifestyle!

SunshineGirl

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Re: Emergency Fund?
« Reply #4 on: May 31, 2013, 09:26:27 AM »
Nice action you took! But you saved yourself that money by being open to others' ideas.