How much do you have in emergency funds?

stacey1508 · July 2013

I'm trying to figure out if my husband and I have enough in emergency funds to stop saving for that and start putting extra money towards our student loans. Considering our current budget, we only have about 3-4 months' worth. But that budget includes shopping, eating out, etc- things I imagine we wouldn't be spending money on if we weren't employed. I figure that we could cut our current budget down quite a bit if we had to which would mean we could live off our emergency fund for more like 6 months. But I'm not sure if we should really just go off of our current budget or just the "necessities" budget. What would you do?

We have A LOT of student debt, and I'm inclined to put whatever extra funds we have towards that rather than our emergency fund. But I'm not sure if we have saved enough yet. Any advice is appreciated!

sparklerose · July 2013

I think that's enough if you have debt to pay off, or would be for me and my family. We still have some CC debt (nearing the end of our debt snowball) and only have $2500 in an efund while we finish paying off the debt.

Xan84 · July 2013

I used to be in your shoes. I graduated with $65,000 in student loan debt. During the years when I was paying it off, I only kept a small emergency fund of about $5K. I put all my financial effort into paying double my monthly payment on the loans because I just wanted to get rid of them. It ended up working out for me - I never needed the e-funds, and the loans were paid off in 5 years. It sounds like you have even more of a savings cushion than I did - 3 to 4 months worth including shopping and eating out is really good. If you were unemployed I'm sure you could stretch it even further. I'd say use your necessities budget when establishing your emergency savings goals. I think you're in good shape and I'd concentrate on knocking those loans out, if I were you.

irishfemme · July 2013

Conservatively, you will want to shoot for an ultimate e-fund of 8 months' worth of expenses.

You are probably in a good position to start paying back those loans aggressively if you are comfortable with the amount you have in savings. The old standard used to be a 3-month e-fund, so it sounds like you're in a good place.

Worst case scenario, you could also scale back those SL payments if you needed to help out your monthly budget, too, in the event you needed the money for expenses if something were to happen with either of your employment.

TXFrank · July 2013

We saved up about 4 months for an e-fund and then starting dumping everything on the student loans. The end goal is to have 8-12 months in an e-fund after we pay off the last student loan. We are really looking forward to not having the student loans anymore.

I think you should have as many months as you feel comfortable though, think about how long would you be unemployed before you took a job in a field you were over qualified for or how willing are you to stretch the dollars you have if needed.

brij2006 · July 2013

That sounds like enough when you are going to begin debt payoff. Especially if you can make that go further by cutting out extras.

We have about 3 months worth of an E-fund, but we can pay all of our bills with only 1 income. So we view it that if 1 person were to lose their job, we could still make it by with the 2nd person's income. We would definitely have to cut down on extra's, but we could do it. So our E-fund is there for some of those "extra's" or if God forbid, we both lose our jobs at the same time.

MommyLiberty5013 · July 2013

We have about 3 1/2 months at our current spending levels. But we have about 6 months if we went bare bones. We also separately have about 6 months worth of food in our home, which would cut down costs exceptionally if we needed to.

CuriousKiddosMama · July 2013

We currently have between 3-6 months in an emergency fund. If we go bare bones it would probably last us longer than that. Like PP said though, I also have a huge stocked pantry and deep freezer, so that would help out the budget a lot too if we needed it. We wouldn't need to spend hardly anything on groceries except for maybe milk and produce.

vlagrl29 · July 2013

currently we have 1 month's, but there is another account I have with fidelity that we treat as an emergency fund that we hope to never touch. We are self employed so ideally I would like 3 months of "cash" in our bank before I start paying off my school loan more than my monthly minimum.

orangehills · July 2013

We currently have 4 months efund so far (but that's both of our incomes together and the odds that both of us would lose our jobs at the same time seem pretty slim). But we aren't stopping until we have 7 month e-fund for both of our incomes combined. For you, I'd say you are probably safe and can start putting extra to your student loan. If something were to happen, you can just stop paying extra on that and go back to putting it into savings.

stacey1508 · July 2013

Thanks for all of the input! I was thinking we had enough savings, but it's good to hear that others do, too. Plus, I feel like we'll still be saving in a way by paying down our student loans because our monthly payment will go down. Thanks again!

von1976 · July 2013

We only have about 1 month's living expenses.

I know that we should have more, but we have some wedding debt we're paying off. The good news is that it's at 0% APR, and that it will be paid off within a year (maybe sooner).

I would like to have at least 3, but it's a process to get there.

FWIW, I'm only considering necessary expenses in our fund. Things like mortgage/car payments, utilities, grocery and gas. I figure if one of us loses our job, we're not going to be shopping, doing home improvement projects, or going out to dinner. We would cut back on all those things if that were to happen.

Kellyt2012 · July 2013

We have $1,000 "emergency fund" then also 6 months worth of monthly expenses. We count monthly expenses as "Mortgage + $800" because we know we wouldn't be paying for big things like daycare, etc. if we lost a job.

Kellyt2012 · July 2013

I think 3 months is a good minimum to goby, so yours sounds good!

srgw · August 2013

H and I have 5-6 months of an e-fund. We were throwing all our extra cash at his SLs but stopped temporarily since H needs surgery. Once we pay all the surgery bills and get our e-fund back at 5-6 months we'll continue to throw the extra money at those SLs. I hope this will be in Nov/Dec, but we'll see.

moonprincessd · August 2013

I remember that the suggested amount to have is 6 months of pay just in case you lose your job, that way you have something to live off of while finding another one.

However, we just bought a house and our emergency fund has sunk, but we both have pretty stable jobs. Still a risk though, so we're definitely going to work on building that emergency fund back up!

R.Wilsonny · August 2013

We have about 3 months worth put away, but my H and I discussed reviewing our finances to see how we can start building it up even more. We bought a house last August, so similar deal to PP - the money we saved was used for the house. Then we had some damage from hurricane Sandy last year, which was covered by insurance, but what wasn't covered was the extra expense we incurred since we were away when the hurricane hit and were stranded where we were for an extra 5 days. (so hotel + food for 5 days) I'm comfortable with what we have in the bank though, so at least we would be covered in case something happened.

orangehills · August 2013

We have about 4 months of e-fund savings right now. But, that is for if we both lost our jobs and that covers everything (except savings, since obviously we wouldn't be putting into savings at that time.) So really, if just one of us lost our jobs, what we have now would go further. By next summer though, we'll have 7 months of savings (that's covering both of our salaries). We're slowly building our way up! After we get to that point, all we'll have left is our mortgage, one car payment, and our very low student loan, so then I'm just planning to put everything into new house down payment fund. I'd say what you have now is enough, maybe continue to put a little bit towards savings each month, and then the rest towards your debt.

Wulfgar · August 2013

If you have 3 to 4 months of expenses in an emergency fund currently and a ton of student loans you need to stop funding your emergency fund while you pay off your student loan debt.

Depending on who you ask, once you have a few thousand set aside for emergencies then you should focus on debt repayment since emergency funds have basically no return on money.

How much do you have in emergency funds?

Re: How much do you have in emergency funds?

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