Emergency (oh my God fund)

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NabSh
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Emergency (oh my God fund)

Post by NabSh »

Do you have Emergency fund (oh my God fund). These are not your planned expenses like kids tuition or new roof.

Background:
In 2009 I was buying a new home and since the market had just crashed, I put 1 year worth of living expense in a CD.

In 2018 I bought a new house (sold old house) and put another 1 year worth of living expense in a CD.
I was worried that since I am increasing my mortgage, I should have have 2x my Emergency fund.

Current mortgage is about 60% paid. Both spouses have stable jobs.
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retired@50
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Re: Emergency (oh my God fund)

Post by retired@50 »

I'm not sure there is a right answer to this question.

You have to hold as much cash as you need to be able to sleep at night. For some folks, this number is around $100, and for others it exceeds the FDIC limits at the bank.

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livesoft
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Re: Emergency (oh my God fund)

Post by livesoft »

We have an amount of money in bond funds that can be used at any time for anything we want.
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runner3081
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Re: Emergency (oh my God fund)

Post by runner3081 »

We base ours as follows:
10K - Major home issue - also insurance deductible for homeowners
10K - Healthcare out of pocket limit
13K - Car replacement
4.5K - Misc

This also covers > 12 months of all expenses.
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NabSh
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Re: Emergency (oh my God fund)

Post by NabSh »

What about money for food and other bills?
runner3081 wrote: Mon Apr 12, 2021 8:03 pm We base ours as follows:
10K - Major home issue - also insurance deductible for homeowners
10K - Healthcare out of pocket limit
13K - Car replacement
4.5K - Misc

This also covers > 12 months of all expenses.
KlangFool
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Re: Emergency (oh my God fund)

Post by KlangFool »

OP,

I keep 1 year to 3 years of expense in CASH as my emergency fund. I consider CASH as a separate asset class.

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celia
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Re: Emergency (oh my God fund)

Post by celia »

How is kid's tuition an emergency? Did you adopt some 17 year-olds who were already accepted into college?

Or your kids partied in college and lost their merit scholarships?
Normchad
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Re: Emergency (oh my God fund)

Post by Normchad »

I used to have such a fund when I was younger. It was cash set aside just for emergencies. (Car needs a new transmission) kind of thing.

I'm older and more established now. I no longer have a dedicated fund. I do have a lot more cash sitting around though. So I could use that, or I could tap the Roth IRA if necessary, etc etc. And of course, I'd hit up the credit cards first in an emergency.....
Gooch1226
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Re: Emergency (oh my God fund)

Post by Gooch1226 »

NabSh wrote: Mon Apr 12, 2021 7:18 pm Do you have Emergency fund (oh my God fund). These are not your planned expenses like kids tuition or new roof.

Background:
In 2009 I was buying a new home and since the market had just crashed, I put 1 year worth of living expense in a CD.

In 2018 I bought a new house (sold old house) and put another 1 year worth of living expense in a CD.
I was worried that since I am increasing my mortgage, I should have have 2x my Emergency fund.

Current mortgage is about 60% paid. Both spouses have stable jobs.
I’d say since you have 60% of your house paid off . Consider a HELOC as a source of emergency fund .
runner3081
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Re: Emergency (oh my God fund)

Post by runner3081 »

NabSh wrote: Mon Apr 12, 2021 8:45 pm What about money for food and other bills?
runner3081 wrote: Mon Apr 12, 2021 8:03 pm We base ours as follows:
10K - Major home issue - also insurance deductible for homeowners
10K - Healthcare out of pocket limit
13K - Car replacement
4.5K - Misc

This also covers > 12 months of all expenses.
As I said, this amount of money covers over 12 months of all expenses. If job loss AND all of these happened at one time, we would hit the brokerage account next.
lazynovice
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Re: Emergency (oh my God fund)

Post by lazynovice »

Not anymore. The fewer big expenses I have ahead of me, the less emergencies I am exposed to. My kids are grown and almost launched. My husband is retired. I am close enough to retirement that job loss would just mean we kick into retirement mode or part time work sooner. We moved the oh my God fund into the portfolio last year. I guess what we have now is more like and Oh My Goodness fund.
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NabSh
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Re: Emergency (oh my God fund)

Post by NabSh »

I said I do not consider tuition as emergency fund. As those are planned expenses.
celia wrote: Mon Apr 12, 2021 8:49 pm How is kid's tuition an emergency? Did you adopt some 17 year-olds who were already accepted into college?

Or your kids partied in college and lost their merit scholarships?
Marseille07
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Re: Emergency (oh my God fund)

Post by Marseille07 »

Yes, it's 4% of my AA value. The idea is, 4% of my "number" would pay the biggest tax bill I've ever faced, so I'm operating accordingly before hitting the number.
Last edited by Marseille07 on Tue Apr 13, 2021 1:29 am, edited 1 time in total.
momvesting
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Re: Emergency (oh my God fund)

Post by momvesting »

runner3081 wrote: Mon Apr 12, 2021 8:03 pm We base ours as follows:
10K - Major home issue - also insurance deductible for homeowners
10K - Healthcare out of pocket limit
13K - Car replacement
4.5K - Misc

This also covers > 12 months of all expenses.
This is pretty close to what I do, basically I prepay known larger expenses into savings or CDs and they sort of serve two purposes and could be replaced or not used as intended. For example, I built a CD ladder several years ago with the money I'd need for the AOTC and LLC tax credits. Yes, I could cash flow them, but they were set aside a little over three years ago even though my kid started college this year. Then I have a fully funded new roof fund and have started a new car fund for when we will need a new car in about 5 years. If there was a job loss or some larger emergency we may delay the roof, only pay college from the 529 and just pay the taxes on 529 earnings to claim AOTC, and I certainly would not go buy a new car. All of those funds together add up to between 14-18 months of our normal household expenses and could be used as such.
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tooluser
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Re: Emergency (oh my God fund)

Post by tooluser »

I have an emergency fund, but not so big that I would substitute it for invoking the action of a deity.
ChiKid24
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Re: Emergency (oh my God fund)

Post by ChiKid24 »

KlangFool wrote: Mon Apr 12, 2021 8:47 pm OP,

I keep 1 year to 3 years of expense in CASH as my emergency fund. I consider CASH as a separate asset class.

KlangFool
1 to 3 years seems like a pretty wide range. Are their specific situations that bring it down to one or up to three? Of course either are fine if that's what you desire, just curious to understand why it's so broad.
KlangFool
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Re: Emergency (oh my God fund)

Post by KlangFool »

ChiKid24 wrote: Mon Apr 12, 2021 9:32 pm
KlangFool wrote: Mon Apr 12, 2021 8:47 pm OP,

I keep 1 year to 3 years of expense in CASH as my emergency fund. I consider CASH as a separate asset class.

KlangFool
1 to 3 years seems like a pretty wide range. Are their specific situations that bring it down to one or up to three? Of course either are fine if that's what you desire, just curious to understand why it's so broad.
I was 1 year. Now, I may be retiring if I cannot find the next job. Hence, I increase my EF to 3 years.

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Topic Author
NabSh
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Re: Emergency (oh my God fund)

Post by NabSh »

So for someone in mid 40's who has the majority of assets in Tax deferred or in the house. Perhaps 1 year in CD and 3 months in checking is sufficient.
MishkaWorries
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Re: Emergency (oh my God fund)

Post by MishkaWorries »

NabSh wrote: Mon Apr 12, 2021 9:48 pm So for someone in mid 40's who has the majority of assets in Tax deferred or in the house. Perhaps 1 year in CD and 3 months in checking is sufficient.
How many earners in the family? One paycheck needs bigger ER.

How stable job? Government worker probably needs no more than 6 months since the chance of losing the job in the first place is slim.

How long would it take to find a new job. A common position like nurse or programmer would probably need 6-9 months. A niche employee may need 3 years of an ER.
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tooluser
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Re: Emergency (oh my God fund)

Post by tooluser »

NabSh wrote: Mon Apr 12, 2021 9:48 pm So for someone in mid 40's who has the majority of assets in Tax deferred or in the house. Perhaps 1 year in CD and 3 months in checking is sufficient.
I think that is not unreasonable. I have never been laid off or had a truly OMG unexpected expense. Ideally you want to be able to replace a failed appliance or perform a major repair on house or car without much concern. The greater impact is to live without too much fear if you are unemployed. Then make sure you gradually build the fund back up again after the hit.

For me, things like local warfighting or economic collapse are in the OMG category, and there's not much you can do about those. Worth a prayer.
CascadiaSoonish
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Re: Emergency (oh my God fund)

Post by CascadiaSoonish »

At the risk of my luck running out, in the past decade we've never had an emergency spend requirement that we couldn't handle with a credit card or some other financial move. Right now our emergency fund is the amount of cash First Republic wants maintained in checking as an expectation for the mortgage and line of credit. It helps me sleep at night so I don't mind the parked cash. Knowing we're unlikely to need to use those funds has contributed to the feeling of security.
H-Town
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Re: Emergency (oh my God fund)

Post by H-Town »

NabSh wrote: Mon Apr 12, 2021 7:18 pm Do you have Emergency fund (oh my God fund). These are not your planned expenses like kids tuition or new roof.

Background:
In 2009 I was buying a new home and since the market had just crashed, I put 1 year worth of living expense in a CD.

In 2018 I bought a new house (sold old house) and put another 1 year worth of living expense in a CD.
I was worried that since I am increasing my mortgage, I should have have 2x my Emergency fund.

Current mortgage is about 60% paid. Both spouses have stable jobs.
In case of emergency, everything is fair game. Not just money.... HELOC, family loan, personal loan, take on second or third job, loan from 401k, take distribution of your tax advantage accounts, credit card line credit, and so on.

Generally speaking, human kind is resourceful. Most don't need $500k in cash just in case of emergency. Heck, most people don't have $5000 in cash in case of emergency. We just deal with emergency like we always do.

Most bogleheads here won't even touch the cash we set aside and label them emergency fund. I know I haven't. I use my cash reserve to buy stocks when market down and for major purchases (roof, fences, car, HVAC, heater, etc.)

Many will say keeping 6 month expenses in cash will help them sleep at night. I don't know how much of that is true... It's not like they don't have money. Their total portfolio could exceed 7 figure and they'd be sleepless because they don't keep 6 month expense in cash? I really doubt that.
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Doc7
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Re: Emergency (oh my God fund)

Post by Doc7 »

My wife and I spent our entire marriage until now building up a “6 Months Expenses Emergency Fund” which is based on our mortgage, utilities, normal grocery budget, daycare , keeping internet but not TV/Netflix, etc. She is a state university employee and I am a utility management position. I find it unlikely we would both lose our jobs simultaneously, and if we did not I suspect we would probably not be “cutting the TV cord” the day one of us lost their job, but if we both did, sure. I also include an extra 6K for cobra insurance, which I have almost no clue if this is realistic number or not.

So for 8 years we’ve been plugging away, varying amounts over the years (the last 12 months at $650/mo) and even had our first real “emergency” when a vehicle ended up in a septic tank. (Don’t want to get into details.) even with that, we finally made it to our target $36K. Well, over the years we have used the EFund as a “project fund” and house down payment fund which is exactly why it took us 8 years to fill it. We viewed it as “kind of available money.” The day we hit our 6 Month target I put it on “LOCK DOWN.” In fact, I really rolled the dice on us keeping our jobs for next 11 months and put 50% of it, 18K into I-Bonds that I can’t even get to until next March.

We quickly realized (made a post here about it) that suddenly locking up that money completely negated the liquidity we had in that money as it was growing and considered available”.

So now I have cut back the E-Fund to precisely 4.5 months of expenses, opening up 1.5 Mo as “Project / Sinking Fund”. Our leftover budget money of approx 289/mo goes into that. Not building the original E Fund at $650/mo anymore means we have gotten our retirement savings to 25%, and with employer match included we are currently saving 1 year of expenses in retirement annually, at age 36, with 11 years expenses in savings now. Pretty stoked to be honest.
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Re: Emergency (oh my God fund)

Post by watchnerd »

No, we don't.

Not anymore.

We have no debt and no liabilities and lots of umbrella insurance.

We do, however, have a "Rainy Day Fund", outside of investment portfolio, that we use to pay for non-emergency "fun" large discretionary purchases (home remodeling, cars, vacations, etc).
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Darth Xanadu
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Re: Emergency (oh my God fund)

Post by Darth Xanadu »

Doc7 wrote: Mon Apr 12, 2021 10:18 pm even had our first real “emergency” when a vehicle ended up in a septic tank. (Don’t want to get into details.)
I've seen some sh**ty cars but this is something else.

C'mon. I have to know.
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anon_investor
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Re: Emergency (oh my God fund)

Post by anon_investor »

Yes, we have a multi-tier emergency fund.

Tier 1: 3+ months of unreduced expenses in cash in checking/savings accounts
Tier 2: 5+ months of unreduced expenses in I Bonds
Tier 3: 6+ months of unreduced expenses in Vanguard Dividend Appreciation Index (VDADX) in taxable
Doc7
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Re: Emergency (oh my God fund)

Post by Doc7 »

Darth Xanadu wrote: Mon Apr 12, 2021 10:46 pm
Doc7 wrote: Mon Apr 12, 2021 10:18 pm even had our first real “emergency” when a vehicle ended up in a septic tank. (Don’t want to get into details.)
I've seen some sh**ty cars but this is something else.

C'mon. I have to know.

Tree removal contractor using a cherry picker asked me where septic was, I showed him where septic was.

Turned out I have 2.
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BullMoose
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Re: Emergency (oh my God fund)

Post by BullMoose »

[/quote]

I've seen some sh**ty cars but this is something else.

C'mon. I have to know.
[/quote]


Tree removal contractor using a cherry picker asked me where septic was, I showed him where septic was.

Turned out I have 2.
[/quote]

That stinks.
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BullMoose
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Re: Emergency (oh my God fund)

Post by BullMoose »

Op,
We have an emergency fund. It is well overfunded at this point and likely should be at least partially transferred to our taxable. The wife and I have somewhat risky roles and a young family. I can’t imagine the stress of the last year if we also needed to be worried about making ends meet if one of us lost a job. I recognize that cash is an anchor on earnings, but, at least for us, it lets us keep our focus on the family and sleeping well at night.
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CurlyDave
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Re: Emergency (oh my God fund)

Post by CurlyDave »

When I became an investor instead of just a worker, I had a small emergency fund for a number of years. But then I thought more on that topic and realized that an emergency plan was a much better idea.

In a true emergency everything we have is potentially available. An emergency plan allowed me to keep my head on straight during a job loss and I actually came out far better off.

An emergency plan needs to be no more complex than listing your assets and ranking the pain it would cause to tap those assets. Revise about every 6 months. About a month worth of ready cash is a good start, but keep the rest in your portfolio. Some assets should be recession and crash resistant.
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pasadena
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Re: Emergency (oh my God fund)

Post by pasadena »

I keep 6 months of regular expenses in cash. This is mostly to act as income replacement in case of job loss. I'm not a homeowner, so other potential emergencies are pretty limited - car totaled, need for relocation, unplanned travel to my home country for a family emergency would be the big ones... and they all fit in that amount, and if push comes to shove, I can use the rest of my investments.

I thought for a while that I didn't need a cash position anymore (I have enough money invested to cover several years of expenses and any unplanned expense). When COVID struck last year, I realized that I needed it, if only for peace of mind.
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JoeRetire
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Re: Emergency (oh my God fund)

Post by JoeRetire »

NabSh wrote: Mon Apr 12, 2021 7:18 pm Do you have Emergency fund
Yes.
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SmileyFace
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Re: Emergency (oh my God fund)

Post by SmileyFace »

Yes. It allows me to not have to cash out stocks at bottom of market (Most likely to lose job when market crashes) and also doubles as a large purchase fund (new car, etc). I had about 2 years expenses but I shrunk it down as I started buying iBonds as a second tier.
This topic has been discussed pretty reguralarly here (just search forum for "emergency fund") and some trends I've noticed is some sit on cash but don't like to call their cash an emergency fund while others without an emergency fund have protected jobs or limited responsibilities (no family, mortgage, etc).
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Wiggums
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Re: Emergency (oh my God fund)

Post by Wiggums »

DW and I worked for the same company. Was told that the employment was super stable and they never missed the 5% dividend payment in 100 years. Then our company acquired another company and the work culture changed to taking more risk. Some business decisions did not pan out and losses hit the financial statement. They eliminated a lot of positions to flatten the organization, make us look good on the books, and sold the company.

We always had enough cash in CDs to cover our W2 income. We never lost our job, but employment was uncertain 2-3 times in 32 years.

During the housing boom, we sold a house and moved into a brand new one. The mortgage company for the buyers of our old home screwed up and we used our entire emergency fund to obtain a bigger loan from the builder so we could move on time.

I think we fall into the category of holding one years old w2 income in cash. We spent $25,000 on HVAC improvements this year and are buying stock due to the pandemic market craziness. I would say that our emergency fund is now used to handle those infrequent big expenses.
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BackToSchoolDad
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Re: Emergency (oh my God fund)

Post by BackToSchoolDad »

I feel like this is one of the most personal questions we encounter on this board. As others members often say, it's more about having an emergency plan than a strict EF. My approach and thinking has evolved recently. We're a single earner family, but I work in state government so my job is secure and we operate on yearly contracts. In theory, I would have a good heads up if I was going to lose my job. Further, I'd be able to pivot to self employment pretty quickly and would have some new money coming in within a month.

What we do is keep the actual job loss EF in a stable value fund in my 457b. This currently has 3 months, but I'm directing new contributions to it with the goal of 6 months. If that was exhausted, we'd turn to the high yield savings which currently has around 4-5 months. I view the savings account as more of a sinking fund that we use for lumpy purchases (repairs, cars, vacations). If both of these were exhausted, Roth contributions would be on the table next.
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Re: Emergency (oh my God fund)

Post by JupiterJones »

A defined EF is particularly important in the early and mid stages of getting your financial act together, once you're sitting on a big ol' pile, it's less necessary. For example:

Phase One: You're young and have debt that you need to pay off (credit cards, car loans, etc.) The standard advice is to establish some sort of emergency fund before (or at least concurrent with) tackling those debts. Recommended amounts vary, but the basic idea is to keep from having to go more into debt when/if an emergency happens. And bear in mind that there are plenty of emergencies other than "job loss" that can happen!

Phase Two: You've got your debt figured out, and now you're ready to start maxing out retirement and reach whatever other investment goals you have. Having an EF here is still needed, because A) you usually don't want to pull any money out of tax-advantaged retirement accounts in an emergency, and B) you don't even want to be forced into taking money out of non-tax-advantaged account if they're fairly volatile investments such as stocks, which may or may not lock in a loss. You want something fairly liquid and stable that won't mess up your various financial goals too much if you have to take money out of it.

But let's say you're at "Phase Three" where you've maxed out your tax-advantaged accounts and other things, and you wind up having a lot of low-volatility retirement investments (or other "flexible due date and amount" investments) in regular accounts. At this point you've got money you could safely/easily use for emergencies that doesn't necessarily need to live in a separate, defined "emergency fund".
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Scott S
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Re: Emergency (oh my God fund)

Post by Scott S »

KlangFool wrote: Mon Apr 12, 2021 9:40 pmI was 1 year. Now, I may be retiring if I cannot find the next job. Hence, I increase my EF to 3 years.

KlangFool
Dumb question: How are you adding to your EF if you're not working?
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Reamus294
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Re: Emergency (oh my God fund)

Post by Reamus294 »

I think I am in the middle ground that many of you have mentioned too. We have a separate savings for vacation, car, and other lumpy purchases like planned home projects. On top of that we have 9 months of bare bones expenses in case of job loss which I consider our emergency fund. We haven’t pulled from this emergency fund in 10 years so I am considering including this as part of our retirement funds which would reduce my bond percentage or just put some bonds in our taxable account for easy access, losing out on some tax efficiency. We are close to paying off the mortgage too, so that reduces the amount we need in the event of an emergency.
I was always of the mindset to never touch money intended for retirement until retirement and keep it separate from everything else to avoid any temptation. We’ve proven to ourselves that we are responsible enough to avoid these temptations. I usually take a belt and suspenders approach but I think I have crossed the point where I can generate enough peace of mind with an alternate plan that reduces long-term cash drag.
KlangFool
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Re: Emergency (oh my God fund)

Post by KlangFool »

Scott S wrote: Tue Apr 13, 2021 11:58 am
KlangFool wrote: Mon Apr 12, 2021 9:40 pmI was 1 year. Now, I may be retiring if I cannot find the next job. Hence, I increase my EF to 3 years.

KlangFool
Dumb question: How are you adding to your EF if you're not working?
Portfolio growth. My portfolio had exceed my FI target of 1.5 million. Hence, I am harvesting some of the gain to my EF.

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Scott S
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Re: Emergency (oh my God fund)

Post by Scott S »

KlangFool wrote: Tue Apr 13, 2021 12:16 pm
Scott S wrote: Tue Apr 13, 2021 11:58 am
KlangFool wrote: Mon Apr 12, 2021 9:40 pmI was 1 year. Now, I may be retiring if I cannot find the next job. Hence, I increase my EF to 3 years.

KlangFool
Dumb question: How are you adding to your EF if you're not working?
Portfolio growth. My portfolio had exceed my FI target of 1.5 million. Hence, I am harvesting some of the gain to my EF.

KlangFool
Got it, thanks! :beer
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LittleMaggieMae
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Re: Emergency (oh my God fund)

Post by LittleMaggieMae »

For many years (decades) I had an EF that was 3 months "expenses" and I would increase it if I took on additional expenses - like say the mortgage went up (due increased proptax or insurance) that wasn't part of the original expenses the EF was based on.

At some point in my financial journey my actual EF shrank as I moved it to investments. I started doing EF's by project or goal - so if I did home improvement project (DIY or with a contractor) I'd "figure in" an EF incase things went horribly wrong or over budget and make sure I had some easy to access cash if the project went bad. Same for when I buy an investment property - in addition to all the $$ I will need to get thru the closing and then the fix up of the property - I have EF money allocated to it. I usually start out with a big EF for investment properties but once they are rented and I've gone a year (or two) - I decrease the EF (from the "brand new to me house I have no idea what could go wrong!" amount to a "ok, here's what's on the docket for maint/expenses" amount).

Basically, I an EF that does "serial" project/goal duty. If I've got multiple things going I might increase the amount of cash to cover all of the things.

I have a "sinking fund" bank account which gets money monthly - for Property Taxes, Insurance(s), vacation(s), holiday gifts/spending, season tickets, and a bunch of smaller occasional expenses. It is not part of my "EF" - it's to handle known expenses that I cannot cash flow from my paycheck in the month the bills are due. When the expenses go up so does my monthly "expense amount" that is transferred to the account. The "sinking fund" balance varies over the year - from a low of 3K to high of 12K. The monthly transfer amount smooths out these lumpy expenses (especially the 2 months a year when I need to pay 8K or more in known expenses).
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avenger
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Re: Emergency (oh my God fund)

Post by avenger »

My partner and I have about 20 years of expenses saved in about 80/20 allocation (if you combine the portfolios). I call that “oh my god” money. We are 41 and 53 years old.
cheers ... -Mark | "Our life is frittered away with detail. Simplify. Simplify." -Henry David Thoreau | [VTI, VXUS, BND, VTEB, SV fund]
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Beensabu
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Re: Emergency (oh my God fund)

Post by Beensabu »

Yes, because I'm not rich. My Roth is my emergency fund. A cash floor + 40/60. It is the antithesis of a Roth for most people on this forum. That's because it's my emergency fund, and I'm not paying no stinking taxes in my not rich person's retirement anyway, probably, so I don't care about tax free growth. I care about no penalty accessible funds that can go ahead and grow a little if they want to and that's okay with me.
"The only thing that makes life possible is permanent, intolerable uncertainty; not knowing what comes next." ~Ursula LeGuin
finite_difference
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Re: Emergency (oh my God fund)

Post by finite_difference »

livesoft wrote: Mon Apr 12, 2021 7:28 pm We have an amount of money in bond funds that can be used at any time for anything we want.
I like this answer and livesoft’s past point he has made about trusting your portfolio.

If there’s an emergency and you need money, sell stocks. If the market has crashed, you can sell bonds. You might lose a little bit if bonds dip slightly, but chances are you’ve still made money overall if you compare the return on your bonds compared to sitting in cash or checking or a CD.

(Okay maybe a CD can beat bonds but they’re too much work.)
The most precious gift we can offer anyone is our attention. - Thich Nhat Hanh
ForTheLongHaul
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Re: Emergency (oh my God fund)

Post by ForTheLongHaul »

Love the idea of an “emergency plan” over an “emergency fund.”

We have probably 2 months worth sitting in a money market and another ~6 mos of expenses sitting in a bond fund. When the basement flooded and needed a ton of work, sold/dipped into that fund to cover the combined $25k in costs.

It’s not what my old man taught me to do all those years ago, but it works (and worked) for us.
SanAntionetta
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Re: Emergency (oh my God fund)

Post by SanAntionetta »

37/40 - Dual income household with 2 small kids, no debt except mortgage in which one of us could stop working and the other could take care of obligations, and it would not take either of us long to find employment. The freedom of having limited debts/bills IMHO is much stronger than having extra cash laying around.

3 mos cash
12 mos in Roth IRAs (would only touch that in a serious emergency)
Family annual OOP max+ in HSA
Home project fund in case of any home improvement disasters
We also save in taxable and I have used that for home down payments, etc.

I think we've covered all our bases with this plan although life tends to find ways to surprise us :twisted:
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