Emergency fund--how much in cash?

[6packofun]

Or none? I'm wondering:

 

1) How many months' worth of income you have socked away for your emergency fund, and

 

2) How it's divided among savings (and what type) and if you keep a certain amount of emergency CASH on hand, for a situation where banks/ATMs would be unavailable, etc.

 

On one hand, it's not particularly safe to have large amounts of cash on hand, BUT I can see the necessity of having some around.

 

Your thoughts? :) We don't do Dave Ramsey, btw, so you can give his rec's but I still want regular Joe responses, too! lol

[Chelle in MO]

We have 6 mo. worth of necessary expenses in a regular savings acct. Not much in ready cash in the event our bank money is unaccessible.

 

Chelle

[AuntieM]

Start with $1000 emergency fund, then pay off all debts but the house. After that, work on building an emergency fund equal to 3 to 6 months of your normal monthly expenses. We have 4 kids, so our goal is closer to the 6 months figure.

 

He advises you keep it in a money market account so that it is easily accessible.

 

That's the way I understand it.

[Anne Rittenhouse]

6 months salary in a regular bank saving - available at a moments notice through an ATM

6 months salary in a money market account at a major investment firm - available in about three days by writing a check and depositing it into our checking account

 

Yes, we have one years salary saved and in cash. We have been jobless in the past for 9 months(in a booming economy) and needed the extra cash flow to pay moving expenses to a new location, ie, about 1 years salary, for living expenses, moving expenses, and additional costs to rent/buy again like commissions and or rental deposits, taxes and utility connects. They say six months, but we've needed 1 year's worth in the past. Eventually we got some back in the form of signing bonuses, reimbursed moving expenses, but that doesn't come immediately for bills that need paid right a way. They expect you to float the cash flow by yourself. Be prepared!

[Pamela H in Texas]

We haven't done very well with this. By June (hubby's lay-off), we'll have 3 big checks in full, my new income, a little savings month to month, and then his severance package. Altogether, that comes to approximately 9-10 months. HOPEFULLY, he gets another job immediately (or close) and we won't dip into it AT ALL. We are paring our bills down to $1700 per month which means we'll have to pull out about $400 per month after unemployment. Well, depending on how much I can work (which isn't consistent due to my health). Ideally, we'll not pull any money out, but IF I don't work, it'll be $400 while he's drawing unemployment.

 

Anyway, ideally, imo, is $1000 for EF (available quickly and easily) and 6-9 months living (held separately).

[kim973]

Suze Orman says you should have 8 months of living expenses saved.

[mooooom]

in a regular savings acct, but I haven't looked at it in a long time (pre all this inflation) and I would imagine it is more like 5mo at this point. I have $500 cash hidden in the house. My dad gave it to me during the Anthrax scare just in case, and I have never touched it (well, occasionally I borrow a bit from it but always put it right back). I really like the idea of having it now that I do.

[AuntieM]

6 months salary in a regular bank saving - available at a moments notice through an ATM

6 months salary in a money market account at a major investment firm - available in about three days by writing a check and depositing it into our checking account

 

is really an interest-bearing checking account... immediately accessible. If we could get as good a rate in a regular (quick-access) savings account, we'd probably park our emergency fund there.

[LisaKinVA]

Not quite there yet, but 6 mos. salary (as opposed to expenses) in a regular FDIC account, then we will do another 6 mos. in a money-market account.

[PariSarah]

. . . at our bank. We're trying to get that up to nine or ten months, since we don't yet know how we're going to eat next year. But hopefully we'll find out about grants or jobs by April, and we'll cut that back down to 6 months.

 

We usually have some cash in the house, but just as a result of doing the cash-envelope system. We don't keep an emergency cash fund on hand.

 

DR would say to put the emergency fund in a MM account at a mutual fund broker, because they generally earn better interest than bank MM accounts. Ours isn't enough to make much difference :D, and I prefer the easy accessibility of having our regular bank handle all our non-investment money.

[TwinMominTX]

We have the equivalent of one year of expenses on hand (in regular checking accounts) to use in case of emergency. This is not accounting for any cutting back at all. We probably have close to 1 1/2 or 2 years if we would do some serious cutting of expenses.

 

I can't imagine a scenario where we couldn't get access to money in the bank via a local branch or ATM. However, we also traveled recently to the middle east with $12 total between dh and I. We aren't overly concerned with a lack of access or availability of cash - obviously.

[Peek a Boo]

Or none? I'm wondering:

 

1) How many months' worth of income you have socked away for your emergency fund, and

 

2) How it's divided among savings (and what type) and if you keep a certain amount of emergency CASH on hand, for a situation where banks/ATMs would be unavailable, etc.

 

On one hand, it's not particularly safe to have large amounts of cash on hand, BUT I can see the necessity of having some around.

 

Your thoughts? :) We don't do Dave Ramsey, btw, so you can give his rec's but I still want regular Joe responses, too! lol

 

 

We had about 8 months of emergency funds socked away in our checking MM account. i agree that a solid year is best.

If you can get a better rate on a 3-month cd or other short-term venue, you could always use that too [as long as you have an equal amount of emergency funds readily accessible during that timeframe]. Shop around.

 

we also keep about $500 on hand stashed away.

 

I started building a 3 month supply of food too --it's cheaper to get food now than in the future, and esp during an emergency. lotsa threads [and a social group] about that idea.

 

good luck!

[TwinMominTX]

Where do you purchase your CD's?

 

I have one maturing at the end of January. It was at a rate of 2.5% - when it renews, the best rate they can give me is .5%. I figure I am better off putting it under my mattress.

[Peek a Boo]

I can't imagine a scenario where we couldn't get access to money in the bank via a local branch or ATM. However, we also traveled recently to the middle east with $12 total between dh and I. We aren't overly concerned with a lack of access or availability of cash - obviously.

 

I'm not overly concerned either, but the few scenarios i can imagine:

 

evacuation: ATMs may very well be emptied due to panicking people. Esp if they are evacuating on a weekend when banks are closed, or banks close for security reasons worried about a mob. Banks also usually limit how much you are allowed to withdraw via an ATM in one day --we had to make a special call for them to authorize us to withdraw more.

 

power outage:

 

ATMs and home computers and most banks will not be doing business or dispensing ANYTHING if their computers are down or the electricity is out.

 

again, I'm not that worried about these scenarios, but it's easy enough to be prepared ;)

[Peek a Boo]

Where do you purchase your CD's?

 

I have one maturing at the end of January. It was at a rate of 2.5% - when it renews, the best rate they can give me is .5%. I figure I am better off putting it under my mattress.

 

 

I'm not sure where dh got ours, but i agree w/ your assessment! if that's the best available, then yeah, don't bother.....

[phathui5]

We have six months of expenses in a regular savings account.

[plansrme]

We keep about $500 in real cash in the house. We did this after our darling bankers closed access to our bank account due to suspected fraud (over $1.19) without even trying to contact us first. There was no fraud, but it took several days and many heated phone calls to get it back.

 

Terri

[mamato3 all-boy boys]

During the recent ice storm, I came to see how important having a cash stash is.....gas was for sale, but cash-only. We happened to have $250 from the previous Christmas which I never got around to depositing (it was hidden in an unusual spot), and that would've been good to get us through a week+ or so of necessary expenses.

[Sharon in SC]

Start with $1000 emergency fund, then pay off all debts but the house. After that, work on building an emergency fund equal to 3 to 6 months of your normal monthly expenses. We have 4 kids, so our goal is closer to the 6 months figure.

 

He advises you keep it in a money market account so that it is easily accessible.

 

That's the way I understand it.

 

We have 6+ months of income in our money market account. Recently, we've spoken of bringing some home in cash. Haven't put legwork behind that yet.

[kim973]

During the recent ice storm, I came to see how important having a cash stash is.....gas was for sale, but cash-only.

 

I'm curious what part of the country you live in. I've never heard of gas being sold for cash only.

[Mommyof4ks]

We don't usually have more than $100 in cash, but we do have 6 months of emergency funds in MM and savings accounts.

[Jane in NC]

I'm curious what part of the country you live in. I've never heard of gas being sold for cash only.

 

Part of being prepared for hurricanes includes having a wad of cash. Cash machines and registers need electricity to operate, credit card machines are attached to phone lines. I can see a similar scenario after an ice storm.

[katilac]

I'm curious what part of the country you live in. I've never heard of gas being sold for cash only.

 

I didn't post what you are responding to, but after Hurricane Katrina, there were definitely gas stations and other places operating on a cash only basis (Louisiana). Remember, phone and data lines were down for weeks upon weeks in some areas.

 

As to the original question, we have about 3 months of living expenses readily available, and another few months that we could get at before that ran out (not counting 401ks and such).

 

It's always a good idea to keep cash in the house. We're bad about this, but we try to have a couple of hundred all the time, and more like five hundred when a hurricane threatens.

 

Strange as it sounds, another good rule of thumb is to have enough cash on hand to bail someone out of jail. Even in the most sedate of households, people do sometimes get hauled in by mistake or for things like an unpaid traffic ticket, and the ATM limit isn't usually QUITE enough to get them out :lol:

[plansrme]

Oh my goodness, this is so true. When I was a kid, before ATMs, my MOM was arrested at our house, at about 11 pm. She had stopped payment on a check for my dad's business, as there was a dispute over the amount that was owed, and the business had her arrested for passing a worthless check. My dad scrounged up enough cash from his and his brother's stash so she didn't have to spend the night in jail.

 

She sued the business for false arrest, by the way, and won.

 

Terri

[RoughCollie]

If you hide cash in your house, don't put it in the freezer or in a jewelry box or in a nightstand drawer or in your underwear drawer. Those are places burglars look.

 

I put cash in a book. Then I put the book title in a password-protected file, in case I forget which book I used. This is important if you have a lot of books and a lot of time passes between hiding and retrieving. Trust me!

 

Choose a book you know you will not ever sell, throw away, or give away. I chose Strong's Concordance. I figured no burglar would look there.

 

RC

[Peela]

We have a safe.

I am starting to stack up a savings account though. At the moment there are only a few thousand in there.

[sgilli3]

We have money put aside in our bank accounts in Oz, and keep a minimal amount in the bank here ( for our everyday account)

 

Most of our money is cash - kept in the safe.

 

WE have enough cash for flights out for 5 ( if we need to leave due to an emergency)

 

We have about 1 years wage in safe- as if DH dies suddenly ( or changes job, bounces cheque or any of many other senarios), our bank account will be frozen.This could be anywhere from a few weeks to a few months- so we need cash available.

 

 

 

In another account here, we keep 6 months wages for our employees and everyones housing allowances for the next year.( as rent is paid 1 year in advance here, we need to keep the money aside so it cant be touched- and we always try and stay a year ahead due to the sheer amount needed)

[Nestof3]

Well, with my husband being self-employed, we keep ourselves at a set salary each year, but there is always extra in the business that we could take if we needed to. We'd just bump up his salary accordingly and pay the extra taxes on that.

 

So, we always have (or should I say we HAVE always had) back-up money.

 

We don't take it and store it as salary and store it in our savings b/c we would then have to withhold and match social security and medicare on it.

 

It's easily more than 6 months of expenses.

[Tap]

One thing I have done is stash a bit of money in each of the kids bank accounts. The kids bank account are at a different bank than mine, and I stash extra money in the second savings accounts on each account. They have debit cards, and this way I can get more money at one time, if needed, by accessing each child's account separately. I can take the max out on different ATMs (in case some are empty) for 4 different accounts. This is also helpful if my husband was to die, so I could still have access to money for a month or so to help out if our main account was frozen. The kids accounts are in their and my name. He also has assets separate from mine, if I were to die.

[mamato3 all-boy boys]

I'm curious what part of the country you live in. I've never heard of gas being sold for cash only.

 

Oh, it isn't, usually, but during the recent ice storm in the New England area, some of the stations did not have auxiliary power to run the electronics to swipe a credit card. You could only pump gas and pay cash.