The old emergency fund rule said you should have three months’ living expenses in the bank. Let’s see. For me that would be:
$1,200
rent
+
$19
monthly fees for the
frozen credit cards I won’t close
+
$127
student loan payment, although I bet I could defer that if I
lost my job
+
$150
groceries
+
$100
cell phone bill
+
$100
pet expenses (including
insurance)
+
$138
for the
collection agency—I think I have about $3,500 to
go
=
$1,834
a month
=
$5,502
for three months
The good news is, I have $5,175.23 in the bank. The bad news is, the new rule for emergency funds says you should have a year’s worth of living expenses in the bank, and I do not have $22,008 in the bank. The really bad news is, the money I do have in the bank is set aside to pay my taxes, which means I really don’t have any spare savings. Hmm ... not good.
Also bad, the $5,175.23 is just sitting in my checking account, where it’s earning approximately zero interest. There has to be a better place for it, right?
So here’s what I’m wondering: Do you guys have an emergency fund? If so, is it enough to keep you floating for a year? Or even three months? And is there a “right” place to keep your emergency fund?
By the way, the piggy bank has been great for saving holiday funds! Since I don’t see the cash and I don’t carry it with me, I don’t spend it. I just checked, and I’ve accidentally over-saved. I thought there was $200 in there, but somehow there’s $260! How does that happen?! I told you I’m bad with money! Maybe I should just keep my emergency fund under my mattress!
Need to stash more money in your emergency fund? Here are some
easy ways to save:
