Comments on: Emergency Funds http://www.financingyourfamily.com/2007/09/04/emergency-funds/ Family Finance, Saving Money, Getting out of debt Thu, 20 Nov 2008 21:37:08 +0000 http://wordpress.org/?v=2.2 By: Andrew http://www.financingyourfamily.com/2007/09/04/emergency-funds/#comment-553 Andrew Sun, 16 Sep 2007 16:29:45 +0000 http://www.financingyourfamily.com/2007/09/04/emergency-funds/#comment-553 My wife and I have a $1,000 emergency fund in a high-yield savings account that lets us write checks (2 or 3/month I think) from it or access the money from an ATM. The person we got our financial advice from (Dave Ramsey, who I'm sure you've heard of) suggests this amount and it makes sense to my wife and I. I have great health insurance from my company and both my homeowners policy and my car insurance have $500/deductible so the worst-case emergency of my house and car being destroyed would only cost me $1,000 out of pocket. I think $1,000 is a great amount because it's not a huge burden to build up initially. I think it took my wife and I about 6 months to come up with our initial $1,000 and it just makes you feel better knowing you have that money sitting there just in case. We decided to build the emergency fund before paying off our credit cards (which we successfully did before our son was born!) because we'd hate to be almost done paying off our cards and actually have an emergency that would force us to use your credit cards to cover. Sure we paid a few more dollars in interest by paying the debt off 2nd, but we gained peace of mind. Peace of mind was worth it for us. Your mileage may vary. My wife and I have a $1,000 emergency fund in a high-yield savings account that lets us write checks (2 or 3/month I think) from it or access the money from an ATM. The person we got our financial advice from (Dave Ramsey, who I’m sure you’ve heard of) suggests this amount and it makes sense to my wife and I. I have great health insurance from my company and both my homeowners policy and my car insurance have $500/deductible so the worst-case emergency of my house and car being destroyed would only cost me $1,000 out of pocket.

I think $1,000 is a great amount because it’s not a huge burden to build up initially. I think it took my wife and I about 6 months to come up with our initial $1,000 and it just makes you feel better knowing you have that money sitting there just in case. We decided to build the emergency fund before paying off our credit cards (which we successfully did before our son was born!) because we’d hate to be almost done paying off our cards and actually have an emergency that would force us to use your credit cards to cover. Sure we paid a few more dollars in interest by paying the debt off 2nd, but we gained peace of mind.

Peace of mind was worth it for us. Your mileage may vary.

]]> By: AmyL http://www.financingyourfamily.com/2007/09/04/emergency-funds/#comment-417 AmyL Fri, 07 Sep 2007 14:58:54 +0000 http://www.financingyourfamily.com/2007/09/04/emergency-funds/#comment-417 Excellent point about multiple programs being helpful. I've appreciated many of Mary Hunt's ideas as well, especially the Freedom Account. The vacations have been done on a budget, lol. No wild expenditures here! Even if I had the money for something like that, I don't think I could stand the idea of spending it like crazy. Now that the dollars are mine, I don't like to part with them. Excellent point about multiple programs being helpful. I’ve appreciated many of Mary Hunt’s ideas as well, especially the Freedom Account.

The vacations have been done on a budget, lol. No wild expenditures here! Even if I had the money for something like that, I don’t think I could stand the idea of spending it like crazy. Now that the dollars are mine, I don’t like to part with them.

]]> By: mark http://www.financingyourfamily.com/2007/09/04/emergency-funds/#comment-396 mark Wed, 05 Sep 2007 21:09:09 +0000 http://www.financingyourfamily.com/2007/09/04/emergency-funds/#comment-396 I don't think that's bad at all. You have to weigh in the quality of life that you want for your family, and if that means a nicer home now for memories later, then that's what you're paying for. I would be more in favor of a home than many expensive vacations. Dave Ramsey's stuff does work, and it will get you out of debt, but so will any other concentrated effort to resolve debt issues while spending less than you earn. I don’t think that’s bad at all. You have to weigh in the quality of life that you want for your family, and if that means a nicer home now for memories later, then that’s what you’re paying for. I would be more in favor of a home than many expensive vacations. Dave Ramsey’s stuff does work, and it will get you out of debt, but so will any other concentrated effort to resolve debt issues while spending less than you earn.

]]> By: AmyL http://www.financingyourfamily.com/2007/09/04/emergency-funds/#comment-390 AmyL Wed, 05 Sep 2007 16:59:15 +0000 http://www.financingyourfamily.com/2007/09/04/emergency-funds/#comment-390 We follow the Dave Ramsey suggestion of having at least a grand in savings for emergencies. The next step on the list is having the ten thousand in a money market account. Ahem. Yeah. Haven't even attempted that one lol. We will at some point but I'm guessing that's a few years off. We've been working on home improvement and family travel instead. May not agree with Dave's plan, but I'd rather have the kids living in a house they can actually enjoy and be possessed of fond family memories. Once the house is done I'm a lot more willing to work on savings again. Is that bad? :) We follow the Dave Ramsey suggestion of having at least a grand in savings for emergencies. The next step on the list is having the ten thousand in a money market account. Ahem. Yeah. Haven’t even attempted that one lol. We will at some point but I’m guessing that’s a few years off. We’ve been working on home improvement and family travel instead. May not agree with Dave’s plan, but I’d rather have the kids living in a house they can actually enjoy and be possessed of fond family memories. Once the house is done I’m a lot more willing to work on savings again. Is that bad? :)

]]>