How Much is in YOUR Emergency Fund

25 August 2007 by Jb
Filed under Saving Money

If you read any book on personal finance, there’s always a section about how you should have an emergency savings fund. Most people have debt instead of savings, so the notion of an emergency fund is a foreign one to them, myself included. You can read up on how to best create an emergency fund for yourself in many places both online and in hard copy, but here’s a quick list for you:

• Emergency Funds on About.com
• David Bach’s Finish Rich.com
• The Emergency Fund on It’s Your Money

Having an emergency fund was not a priority for me until about 6 years ago, when I was unemployed for a good portion of the year. I developed my frugal-ness during this period, but it reminded me that this would have been a good time to have an emergency fund. So I started saving, even though I had debt, I saved some money for a rainy day. I admit I did dip into it at one point to pay off a car maintenance expense, but since it was an emergency (I had chipped my windshield), I felt justified.  And now I just checked my balance, and I’ve got over $1000 in it! I was quite pleased to see that. Sure, it’s not the amount I would feel comfortable with, but I’m on my way now. I am targeting having approximately $5000 in it, as that would cover expenses for about 3-4 months.

Once I hit the magic number, I’m going to start taking half my deposit and redirect it towards my fun savings funds, which consist of two vacation funds, and a new computer fund. I’ve also started up an “I want a new cell phone fund”, using only my toonies for that (toonies are the $2 coin we have here in Canada, for those of you not familiar with them.) My brother in law uses this method for his video games, and he finds it works quite well.

I’ll end this post with the title, to get you thinking and talking about your savings: how much is in YOUR emergency fund? Are you saving up enough for 3, 6 or 12 months?

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