Author Topic: How much emergency fund should I have?  (Read 535 times)


  • Stubble
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How much emergency fund should I have?
« on: July 28, 2020, 09:48:06 PM »
Currently we have $19k, mostly ($15k) in index funds bc my husband worries about inflation. Anything more is going for now in a HYSA and then maybe in a cd ladder or something as the risk of a market fall causing the layoff that makes us use the emergency fund makes me nervous.

We could decrease our spending to around $4k monthly if we had to but usually it's more than that. We have sinking funds for a lot of things so I'm really just talking about the no-touch-unless-job-loss-or-cancer fund.

Question: save to a total of $24k (6 months at lowest spend)? Or more? Less?

Points for more:
-only one working adult
-4 amall kids
-job in a sparse field
-high property taxes on all our houses
-global pandemic!
-you just never know!!!

Points for less:
-rental income
-lots of equity in rentals inc one with no mortgage
-side business income, could possibly increase
-freelance income which could be increased at a moment's notice
-income from above 3 could almost cover $4k today if I stopped saving for rental repairs
-plenty of parental support tho I would be reluctant to do that
-we could qualify for Medicaid pretty easily and definitely for CHIP
-salary-job company rarely does layoffs, is a 30-year type company



  • Senior Mustachian
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Re: How much emergency fund should I have?
« Reply #1 on: July 28, 2020, 10:25:36 PM »
Here ya go... This is guaranteed to help you decide, lol.

Further thoughts:
- You own rental property. Boom, there's your hedge against inflation. Stop worrying.
- Why does one rental have no mortgage? Honestly, at these rates, I'd mortgage that sucker while rates are so crazy low and invest it. After putting a slug of it into the EF, of course.
- CD ladders don't really make sense these days.
- Consider getting a HELOC or two as protection against those things you're worrying about.
- If you mean you have an HSA, learn how to hack it. It's a pretty awesome mustachian kind of loophole.
- With the economy doing what it's doing and will likely continue to do, vacancy is not likely to be a problem. In the last recession, rents went up. It will probably happen again this time, unless say, all your rentals are in a one-dying-industry town. If you lose a tenant because someone lost their job, you'll find one who is losing their home and needs to become a renter again. That sounds cold-hearted, but I'm merely describing what happened last time. That's why rents actually rose, because of good old supply and demand.

Congratulations, it sounds like you're doing a lot of things right.

Oh, and I've had cancer. Odds are you won't. Try not to be afraid of it.