Poll

What is the most you have needed for an Emergency Fund?

$0-$5000
41 (40.2%)
$5000-$10000
25 (24.5%)
$10000-$15000
13 (12.7%)
$15000-$20000
7 (6.9%)
$20000-$30000
7 (6.9%)
$30000-$40000
4 (3.9%)
$40000-$50000
0 (0%)
Over $50,000
5 (4.9%)

Total Members Voted: 102

Author Topic: What is the most you have needed for an Emergency Fund and why?  (Read 3674 times)

Steeze

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Re: What is the most you have needed for an Emergency Fund and why?
« Reply #50 on: April 25, 2019, 07:24:45 PM »
Aptil had some unusual spending: 2.5k in taxes, root canal, closing costs for home, floor refinishing, movers, couch didn’t fit through the door so new couch, need a plumber, brakes on my moms car, gift for family of friend who passed away... still need a bed frame, wardrobe, and some rugs. In the 10k range for sure in 1 month.

Had a 20k emergency fund... I used about 5k and will cash flow the rest. My spreadsheet will not be happy this month.

Imma

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Re: What is the most you have needed for an Emergency Fund and why?
« Reply #51 on: April 26, 2019, 04:52:44 AM »
How does living in a condo eliminate the risk of sudden house repairs?

Dealing with risk isn't a dichotomous situation where you either have an unknown/infinite about of risk, or you've eliminated all risk: risk is the likelihood of undesirable outcomes occurring and their resulting costs.

In the example above, living in a condo doesn't eliminate all chance of a big repair bill, but because the costs are shared many ways the expected bill would likely be smaller.

I don't think death is the same sort of risk as the risk I mention above, because over a long enough time horizon it's a guarantee.  The risk seems to arise out of the unknown costs others may, or may not, leave uncovered to fall to you.  In an ideal world, that risk could be turned into a known cost with a constructive, advance conversation, but I realize that's tough and not always going to happen.

Death is something that we know 100% is going to happen and because I'm a mustachian I know mine and my partner's heirs will not be saddled with those costs. But people also have parents, siblings and close friends who will certainly pass away and may or may not have provided for their own funeral. And while we know at which age they are statistically likely to pass away, life doesn't always go like that. If an unexpected funeral expensive for a relative is not an emergency, what is? If you live in a place where hurricanes or earthquakes can be expected, are those still emergencies when they happen? It's a forseeable risk.

Brother Esau

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Re: What is the most you have needed for an Emergency Fund and why?
« Reply #52 on: April 26, 2019, 07:26:36 AM »
$12,000 for a new furnace and hot water heater.

SotI

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Re: What is the most you have needed for an Emergency Fund and why?
« Reply #53 on: April 26, 2019, 11:32:55 AM »
It depends how you define EF.
For me, it covers any directly accessible "own" liquidity, i.e. immediate cash access w/o using loans, CC etc.

I typically hold up to 6x my monthly disposable income, but some of it is actually planned accruals for insurances, planned maintenance, vet or medical bills (the accruals typically around 15-17% of this "EF"). Only the insurances are actually known, the rest is estimates based on historical data. In good years, I don't need much, sone other year, the accruals all go.
The real emergency fund on top is set to cover both major car replacement and/or unexpected major house repairs. Typically, these unexpected and non-accrued expenses have been in the 7 - 13 k range every other 3 years or so.

This arrangement let's me sleep well enough, even if it is by MMM accounts rather wasted liquidity.
Actually, as I expect major house refurbisment over the nect 5-7 years, I am even looking to slowly increase the accrual part.

Wilson Hall

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Re: What is the most you have needed for an Emergency Fund and why?
« Reply #54 on: April 26, 2019, 12:30:44 PM »

Yes, it is possible to lower your risks, or to trade one particularly bad risk for another more acceptable one.  That's what airbags are for, that's what insurance is for, that's why people take less money for an apparently stable job when they could chase potentially huge gains at a startup that may not be around tomorrow.  But that should never, ever be your primary focus.  You need to realize that there is no such thing as "safe" -- because, again, shit always happens, no matter how conservative your choices, no matter how much you have tried to insulate yourself, no matter how hard you try to always do the "right" thing.  And it usually comes from somewhere you never expected.*  No person in human history has ever been able to see around all the corners, no matter how hard they try.

The older you get, the more experience you have, the more it becomes plain as day that "safe" is an illusion, and if you let that fear drive your choices, you miss out on life.  In the long run, you will be infinitely better off if you just live the life you want -- if you want a condo because it's cheaper and easier to maintain, buy a condo; if you want a house so you have a yard for your dog, buy a house.  And while you're living your life, assume that bad shit is going to happen at some point, from some direction you will never see coming, and do your best to prepare for it.  Get the level of insurance and emergency fund and car/bike safety features you want; eat right and exercise and take care of yourself.  And then work on building up your resilience, so that when inevitable happens, you don't go deer-in-headlights but are instead emotionally prepared to just deal and get on with it.

*Ask me how I know.

Laura33, you said it. Words of wisdom.

One month last summer, all of the following happened: first, my car's starter had to be replaced. Around the same time, we signed a contract to put a new roof on our house. A couple of weeks later, I found out I was going to need routine but major surgery, which would mean staying at home for a few weeks. A few days later, my spouse got hit by a distracted driver, leaving him without a vehicle for over a month and requiring him to have surgery as well. At the end of the month, our central air went out.

We spent the next few weeks getting stuff fixed/replaced and preparing for my operation, which went well. About ten days into my recovery, we lost power for almost a week due to a hurricane.

Now, because we have very good insurance and I have decent PTO, all of the above cost maybe $10K, and believe me, knowing how much worse off we could've been has made us grateful. It was the emotional roller-coaster of not knowing the outcome of medical tests, waiting to get the power back on, and dealing with insurance companies that we found overwhelming at times. If we hadn't had our financial house mostly in order, things would've felt a whole lot worse.

PoutineLover

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Re: What is the most you have needed for an Emergency Fund and why?
« Reply #55 on: April 26, 2019, 01:06:07 PM »
I've never had a true emergency that required me to use my emergency fund (knock on wood). I keep 1-2 regular months expenses liquid, which would be 3-4 if I lost my job and had to live bare bones. Will probably bulk it up a bit since I'm getting a car soon, but since I live in Canada I'm not worried about a huge medical expense, I rent so no big unexpected costs there, and I have disability and life insurance through work. I have enough springy debt that I could pay for any large expense and shift money out of my TFSA to pay it back if I really had to.

habaneroNorway

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Re: What is the most you have needed for an Emergency Fund and why?
« Reply #56 on: April 28, 2019, 07:05:59 AM »
New heating system for the house - wasn't really an emergency as could heat house in other ways and did so for almost a year, but eventually replaced it and it cost like 12k.

Potential emergencies also differ a fair bit  based on where one lives - in Europe you cant really have a "health expense emergency" because its covered by the goverment anyway and my max out-of-pocket expenses will be like 250 dollars regardless of what it is. And if I got laid off I wold be entiteld to sth like $ 45.000 pre-tax yearly for up to three years while trying to get a new job (comes with a few strings attached, however).

The cash on hand is quite large to MMM standards - I could live off it for a few years if I had to, but it's also party as asset allocation to not keep all invested in the equity market and also to be able to have cash to put to work when sth happens - like the dump in equities in December.
 

Sailor Sam

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Re: What is the most you have needed for an Emergency Fund and why?
« Reply #57 on: April 28, 2019, 07:09:46 AM »
I keep $10,000 in a savings account. My wife and are are double active duty, and sometimes the government decides to stop paying us.

Imma

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Re: What is the most you have needed for an Emergency Fund and why?
« Reply #58 on: April 29, 2019, 02:13:52 AM »


Potential emergencies also differ a fair bit  based on where one lives - in Europe you cant really have a "health expense emergency" because its covered by the goverment anyway and my max out-of-pocket expenses will be like 250 dollars regardless of what it is. And if I got laid off I wold be entiteld to sth like $ 45.000 pre-tax yearly for up to three years while trying to get a new job (comes with a few strings attached, however).



Even though the cost of health care is so much lower I still know so many people who got into financial trouble when they got seriously ill. When I got really ill I spent a lot of my EF but due to that spending I'm actually earning more now than before I got ill.

-  you get paid when you're ill but in my country only 70% of your wages. For many people that means they can't even pay all bills anymore. In my case that just means a lower savings rate
- out of pocket costs are €385/year and a few € for some medication, say €500
- every single trip to hospital cost €25 in travel costs
- not all physical therapy was deemed "medically necessary" but it helped me a lot and cost me €600
- as I have a partner I don't qualify for home help so I paid w cleaner (€25/every other week) to make it easier on him
- our heating and food bill were higher for a while

None of those are big expenses but you wouldn't believe how many people couldn't afford them.

habaneroNorway

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Re: What is the most you have needed for an Emergency Fund and why?
« Reply #59 on: April 29, 2019, 02:21:23 AM »
Yes, but there is still a quite big difference from having some known guaranteed income for a few years in the case of a layoff and also knowing that you won't have to fork out serious money to get treatment for a serious health issue.

But in any case, income can drop siginficantly and new expenses can pop up, and if already living on the margin the consequences of significantly lower pay can be dramatic if sustained over time. But one would need a lower EF to cover the gap.

People get into financial trouble for all sorts of reasons - health issues included.

jlcnuke

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Re: What is the most you have needed for an Emergency Fund and why?
« Reply #60 on: April 29, 2019, 06:54:04 AM »
~$9k for dental work (technically a "desire", but I really wanted to keep having all of my front teeth there.

~$9k to purchase and install a whole home generator to ensure my mom's required ventilator would have power even if the power was out for an extended period of time (it went out for 5 hours the next month... battery on the ventilator is rated for 4 hours...).

~$4k to sell my last house.