As I began the my PF journey a few years ago, I did what just about every financial adviser recommends; I set up my emergency fund. Some suggest saving $1,000 then focus on paying off debt, while others recommend saving up more like three or six months of expenses. Don’t ask me why, but I decided $10,000 sounded like a good goal. So, like a train car, I kept on chugging, and eventually realized that goal.
I have had this $10k just chilling in my online savings account for 1.5 years now. Fortunately, I’ve never had an emergency. But don’t get me wrong, I’m not stupid enough to think I’m immune to emergencies.
Difficult times are sure to come. I could lose my job, my car could spontaneously combust, Girl Ninja could immaculately conceive 19 babies, etc. I think Emergencies can be pretty well defined via this highly complex mathematical formula I’ve worked up…(you can thank me later)…..
Humans + Life = Emergencies/Bacon
Maybe the formula doesn’t make as much sense as I was hoping, but the point is….something will go down, at some point in the future, that will require me to use some portion of my emergency fund. Is this fact vague? Absolutely! But it’s definitely important to remember stuff happens. And when it does, I’ll be oh-so-glad I have that E-fund… that is, assuming the emergency doesn’t cost $10,001 or more.
Like I said earlier, I’ve had my E-fund set up for 18 months and have been fortunate enough to not need it. I know this isn’t the case for everyone though, so I’d like to see what your E-fund situation is looking like. Take a second to respond to the questions below 🙂
How much do you have in it?
When did you first establish it?
How many times have you accessed it for emergencies?
Have you ever cheated and used it for a non-emergency?