Have you used your emergency fund?

Beany Babies

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?

50 thoughts on “Have you used your emergency fund?

  1. 1. I have about a 65 month emergency fund right now. Trying to get it up to 360 months 🙂
    2. Probably since I started working, 22 years now?
    3. All the time because it’s all accessible.
    4. Nope.

    • In regards to number 4, because my emergency fund is lumped together with all my money, I have to say I do use it for non-emergencies :/

  2. I have one block of savings which I consider untouchable, becuase it’s in an ISA. This means it’s tax free, but there’s a limit to how much I can put in per year, and if I take some out, I can’t put it back in again. I guess this would be used in an emergency, but I don’t officially think of it as an e-fund. At the moment I think of it as my house deposit! It’s up to about £9.5k at th mo, and grows every month. I started it when I started work just over 2 years ago, and haven’t touched it yet.

  3. How much do you have in it? $26,000

    When did you first establish it? When I first started work, 8 years ago

    How many times have you accessed it for emergencies? Zero times

    Have you ever cheated and used it for a non-emergency? Nope, but it is tempting sometimes 🙂

  4. Wow, really, I didn’t know there was a pokemon that looked like a train!

    Aaaaanyway, my emergency fund involves being paid ahead on all of my bills by one month. And that’s it, which makes the rest of the questions moot. So, depending on the time of the month, anywhere from $600-$1200 in money I don’t have (but won’t have to spend).

    Awesome plan, right?

  5. I have a couple years expenses in bonds. I accessed it all the time for not emergencies until I put them into a vehicle that would slap me with a penalty if I touched it. What can I say, I need a negative motivator sometimes.

    I Haven’t touched it since. It’s like the money doesn’t exist if I don’t see a balance in my checking acoount. I built it up slow so I wouldn’t miss the money when it got put into bonds. I think it took about 6 years to build up that much. We also have a cash buffer too now so that we don’t have to access the real e-fund. I say the bond thing would only get touched if we both lost our jobs and unemployment ran out, or one of us got a seriously expensive medical condition. We’ve been very fortunate so far. I hope it stays that way.

  6. How much do you have in it?
    3k but the goal is 5k then to pay down my student loan

    When did you first establish it?
    last february

    How many times have you accessed it for emergencies?
    less than 10 times (all for medical reasons)

    Have you ever cheated and used it for a non-emergency?
    Nope (i also keep my gas money with it so that i can meet the power checking requirements to get the good interest rate ie: paper statements, 10 signature based transactions/month, and 1 direct deposit/month)

  7. I don’t really have an emergency fund, I just have a lot of money in a Roth IRA and other liquid investments that I could use if I needed the money. I don’t keep an “emergency fund” for two reasons:

    1. I have no desire to put such a large chunk of money in an account that has very little or no interest return.
    2. I have fully insured myself against almost anything that could happen. Renters insurance, full coverage car insurance, health insurance, long term disability insurance, dental insurance. There”s not a whole lot that can happen to me that would leave me needing $10k in cash today.

    • I too consider my Roth IRA a Roth IRE (E- for emergency). I know that if the crap hits the fan I can take out my contributions with no penalty before resorting to credit cards or payday loans, etc.

  8. 1) 10K, no thought went into that number, it seemed nice and round.
    2) Started with my first job ~ 8 yrs ago, but probably didn’t reach target until 4-5 yrs ago.
    3) 2-3 times*
    4) *The above 2-3 times were probably not “emergencies” just sudden, major, home expenses. One was replacing our air conditioner….it was about 87 in our living room, my husband called that an emergency.

  9. In Oct./09, while Hubby and I were on holidays, we got word upon our return Hubby lost his job (along with 20 other guys… the 3rd round of lay-offs before the plant closes next April). He got a 21 week buy-out package (he fared better than most… 3 weeks for every yr. of service). We put the money in a separate account, and did everything we could to not touch it… and we did really well. Hubby found a job in Feb/10, and it was only in January that we started to dip into it (car needed a $700 repair, Income Tax for 2008, my salary was stretched really thin at that point, etc). We were lucky to have that money, and it really drove home the importance of an Emergency Fund, because we’d have been screwed, blued and tattooed had he not got that buy-out!

    Hubby’s just started a better-paying job yesterday, and building our EF is something that we are planning to start ASAP. My goal would be to have at least a 6 month reserve of one of our salaries so that if something happened to either one of our jobs, we wouldn’t have to live only 1 income; the person looking for the job aso wouldn’t feel the need to jump on the first job that came to them, either. That 6 month reserve includes $ to make our CC payments… working on paying that debt off will help us to trim down the Emergency Fund if we chose to do so.

  10. How much do you have in it? 5,000

    When did you first establish it? 25 years ago

    How many times have you accessed it for emergencies? 0

    Have you ever cheated and used it for a non-emergency? yes-divorce wiped it out, then I used it once to pay off an underwater mortgage. Now building it back up to 6 months living expenses in case I become a statistic in this economy.

  11. How much do you have in it? ~$12,500 (goal is $28,000)

    When did you first establish it? A few months ago

    How many times have you accessed it for emergencies? Zero

    Have you ever cheated and used it for a non-emergency? Nope.

    We started following Dave Ramsey in February and put away our first grand then. In July/August we paid our last non morgate debt (around $30K total debt) and started our full e-fund. We decided that we are more comfortable stashing about 6-8 months of salary instead of expenses. It’s quite a bit more money, but knowing its there is peace of mind.

  12. we have 10k in our e fund. never touched it, cheated, etc. for the past yr. i’m trying to funnel more into it bit by bit, because unfortunately 10k just isn’t enough to say its “fully funded” in the event of unemployment. we’re funneling most of our money into a new used car fund because we’re crossing our fingers at when the car i’ve had since i was 17 will kick the bucket… (its 14 yrs old – goooo Honda!)

  13. 1. We have $10,000 in ours, growing approximately $5K per year

    2. Started establishing it two years ago, after eliminating all debt! Keep mine in a tax free savings account.

    3. I am having to use mine for the first time this month – had to pay $1000 for a deductible on my car insurance (my van was smashed by a fly-away spare tire). I’m so protective of the emergency fund though that I’m very hesitant to use it!

    4. Have never cheated!

  14. We have an emergency fund. The amount depends mostly on our income since we rent and tend to live wayyy below our means. We would only need about $10K to make it for 8 months or more. So that’s been our rolling amount although at times it is more.

    How much do you have in it? Right now aprox $10.5K but it will go up to aprox $20K – $30K when we buy a home later this year or early next year.

    When did you first establish it? A couple of years ago but we didn’t get serious until we had a real emergency and actually needed to use it.

    How many times have you accessed it for emergencies? Twice and each time we have curtailed our spending to build it back up.

    Have you ever cheated and used it for a non-emergency? Yes, on occasion we will pay ourselves early to avoid things like fees, etc. On unplanned expenses (like the 2007 IRS notice that they taxed us wrong-after we paid for our annual vacation). So yes we paid that using our emergency fund. Then the next paycheck we paid ourselves back. We don’t however ever use it for splurges or anything non-essential.

  15. I forgot to mention that we also have another savings account and investment accounts. Right now we have to keep things pretty much where they are (due to mortgage approval), but after we sign on the dotted line, the investments and other savings account will move over to beef up the emergency fund.

  16. As a freelancer, most of my savings are emergency savings 🙂

    How much do you have in it?
    From last count, about $15,000 in a savings account that grows tax-free
    $60,000 in liquid cash, about to take half of that to put into investing.
    $30,000 in my business account I could raid if desperately needed but should leave in there.

    When did you first establish it?
    2006. I had $1000 in there until I cleared my $60,000 loan.

    How many times have you accessed it for emergencies?
    All of 2009. Used it to live off on, pay for a small trip to Europe. Spent about $1000/month + $3000 for the trip.

    Have you ever cheated and used it for a non-emergency?
    What do you consider cheating? 🙂 I use it to live on when I don’t have a contract, but that’s about it.

    • Thanks for sharing FB, i knew your experience would be different than most since you can have long gaps between work. P.S. wanna take me to Europe?

  17. How much do you have in it? Just $1000 now, until we get our debt paid off. Hubby’s small business has an e-fund of $2000 right now, which will also increase once the debt is paid off.

    When did you first establish it? May 2009 or thereabouts.

    How many times have you accessed it for emergencies? I don’t think we have used our personal e-fund at all. Hubby has used the business e-fund multiple times for equipment repair. He has also used it when clients haven’t paid on time and he needed money for general operating expenses.

    Have you ever cheated and used it for a non-emergency? Nope. We had a big discussion one time about something that we needed money for and whether it was an emergency or not. We decided it wasn’t a big enough emergency to validate dipping into the e-fund.

  18. I can’t answer all your questions directly, but a lot depends on how you define the word “emergency.” I would say that if you have an unavoidable obligation you can’t satisfy by any other means, you have an emergency.

    This term “emergency fund” is getting to be the new buzz word in personal finance (whatever happened to the old-fashioned word “savings account”?), and you’ll hear self-proclaimed experts like The Soooooooze braying that you must have an emergency fund of eight months of living expenses in FDIC-insured cash and not a penny less. It’s nonsense, in my opinion. What matters is that you have resources, and if you need money, you have to decide which resources will cost you the least to draw upon in terms of taxes, fees, and potential growth. Remember that money in a cash account has already lost some degree of value because a percentage has gone to taxes, it is earning very little interest, and you may face further losses if inflation returns and interest rates don’t keep up.

    That said, I think it makes sense to keep some after-tax money in cash for maximum liquidity and safety, minimal interest or no. Personally I’m closer to Kevin@thousandaire and the opposite of StackingCash on this point. I keep about 3 months of expenses in a savings account, and I also have another 6-7 in a Roth IRA that (because I’m over 59 1/2) that I could withdraw in full at any time. (Most of my money is in a traditional IRA that I won’t touch until I, duh, retire.) As for the Roth, however, I wouldn’t wilingly touch it either, because that money will continue growing tax-free and it would be the last source of funds I would tap.

    As for using this “emergency” money, a few year ago I had a contractor doing some work that cost more than the initial estimate, and he only took cash. So yes, I had to tap into my savings to pay him, which included a small fee for premature withdrawal from a CD.

  19. How much do you have in it? $1800 (Goal is $10,000)

    When did you first establish it? Fall 2009

    How many times have you accessed it for emergencies? Yes. $1000 for a new clutch for my wife’s car.

    Have you ever cheated and used it for a non-emergency? Yes, I took $1400 for a security deposit on our apartment.

    If it wasn’t for these two circumstances I would be a lot closer to $5,000.

  20. wow… these answers make me feel like a loser! i have $888 in my emergency fund. i’ve accessed it a number of times and am clearly on the way to rebuilding it to $1,000. i’d say yes/no on question 3 – they were unanticipated expenses that had to be paid and otherwise would be paid on a credit card. nothing life or death, but in case of death, i’d sure like our insurance bill to be paid up! i first started having emergency savings in early 2009.

    and now, i’ll go back to experiencing my insane jealousy (slash intense guilt) over people’s over $10K answers!

  21. I JUST finally saved up my very basic e-fund of $1000 (it’s just for me). My goal is $5000, but that will take me a long time to save. Thinking my freelance money will be going mostly towards that goal for the next year. Still haven’t had the chance to cheat and access it for non-emergencies 😛 But I’m moving soon and might dip into it a very little bit depending on how the next couple months go for my family.

  22. How much do you have in it?

    I have one general emergency fund (25K in it, about to add another 20K from inheritance – my goal is 50K). We also have a “House Emergency” fund with another 10K in it.

    When did you first establish it?

    Two years ago for both, when we bought our house.

    How many times have you accessed it for emergencies?

    Not yet (knocking on wood).

    Have you ever cheated and used it for a non-emergency?

    Nope – the idea literally makes my skin crawl and my stomach feel ill.

      • My husband and I have pretty decent salaries and I was also in a car accident where I was paid the maximum amount possible from an insurance company for pain and suffering (unfortunately the other driver had minimum liability insurance so it wasn’t as much as it truly could have been, but was still all that could be done). We also cash flowed our wedding during that time frame, now that that is over we’re able to save more than we were.

  23. I’ve got about $17K right now, with another $5 invested in funds in another account (basically that’s the OMG all hell just broke loose and this is the last resort fund…it’s invested because it’s WAY less accessible).

    I started saving about 6 years ago just to make sure I had a cushion.

    I’ve used it when we have an unexpected vet visit or for the recent hit-and-run on my husband’s car. Also for unexpected car repairs over $400.

    I haven’t used it for non-emergencies that I recall. I have a revolving amount that either goes into or out of my checking account (i.e. about $2K for stupidity, but that gets replaced as much as it’s used), but that isn’t included in the “emergency fund’ portion of the account.

  24. How much do you have in it? $830.00

    When did you first establish it? about 12 months ago.

    How many times have you accessed it for emergencies? Once, for emergency dental work for my daughter.

    Have you ever cheated and used it for a non-emergency? Not that I think it’s cheating, but I use this money for Essential Expenses when I have no other self-emplyment income coming in, like right now (40 days and counting).

  25. We have $1,000 in our emergency fund – we’re following Dave Ramsey and we’re almost debt free! We have beefed it up a few times to take care of car repairs or for times we’ve known we have to take off work (surgery, etc). The max it has been is about $3,000, but once we pay off our debt we’ll consider our emergency fund fully funded when it’s $16,000 (6 months of expenses).
    We established it one year ago.
    We’ve accessed it only a couple of times for emergencies – unexpected car repairs, once we were rear-ended and had to buy a new car seat asap, etc.
    No, we keep it for emergency use only.

  26. Amount in our e fund: $50
    We had $5000 and then we bought a house. We bought the house during the warm June months in Vancouver and had it inspected. Our furnace worked fine when we bought the house but we knew it was old and would need replacing soon. We hoped it would last a year. First cold day this month, we turn up the heat and nothing happens. That’s right, the only time that furnace worked for us was during the house inspection. We think the previous owner’s ghost had something to do with it. So, we have a spanking new high efficience furnace and $50 in our e fund. Buy a house and have kids, it’s amazing how that e fund can evaporate. Hopefully, no new emergencies will happen before our e fund is built up again.

  27. How much do you have in it?
    ≈ $3,600

    When did you first establish it?
    Last June.

    How many times have you accessed it for emergencies?
    Once, in a true emergency when I crashed my car in a small town on Christmas eve. I spent about $2,500 to get out of that jam and the emergency fund provided real peace of mind, as I know that no matter what happened, it wouldn’t bankrupt me.

    Have you ever cheated and used it for a non-emergency?
    Yes. Two months ago the balance reached about $7,500 and I hacked off $4,500 to pay off my car loan entirely after reading one of your posts in which you did something similar. I couldn’t be happier with the decision!

  28. We’ve had an emergency fund in place for 10 years and never spent a penny of it. The total is about 5 months of living expenses. I must admit that I do shift the money around for promotions. You know – get 20,000 bonus points when you transfer $25,000 or more – type stuff.

  29. I was told that you should have at least 6 months of expenses or more in your emergency fund. So if you get laid off you will be able to pay your obligations. Since the economy has been so bad I would suggest having a years worth.

  30. Had $3,000, then vet expenses hit. Having pets means you need even more in your fund! Now we’re building it back up again. It is very important to have.

  31. Great Question Ninja! I’ve always been curious about what other people actually have in their E-Funds, so these comments really satisfied my curiosity!

    How much do you have in it? We currently have $6000 in our E-Fund, though we also have $12,500 in a “car fund” that would obviously be converted to an E-Fund if hubby lost his job… So technically, we could say that we have $18,500 for Emergencies. Ultimately, I will consider the E-fund “fully funded” when we have $25,000 in it.

    When did you first establish it? We opened up the official E-Fund in Oct 2009 and that’s the fund that has $6000. The other fund ($12,5000) was started 3 years ago.

    How many times have you accessed it for emergencies? Zero

    Have you ever cheated and used it for a non-emergency? Nope

  32. How much do you have in it?

    $13,800 (6 months rent/”necessary” expenses like my food, cat food, rent, internet for job-search, gas, electric).

    I also have a savings account for any vet bills which has about $1300/cat in it right now (but I save to it monthly so that will increase). I also have subaccounts for hair, clothes, gifts, donations, annual expenses (taxes, record fair, CSA if applicable), vacation

    When did you first establish it?
    1/2008

    How many times have you accessed it for emergencies? 0

    Have you ever cheated and used it for a non-emergency?
    No. I do have a “down payment” account that I cheat out of all the time, though!

  33. How much do you have in it? $51K

    When did you first establish it? Have been building it up for 6 years.

    How many times have you accessed it for emergencies? It serves the purpose of our savings in a money market fdic insured account. It gets hit from time to time for different things, but always gets “topped off.”

    Have you ever cheated and used it for a non-emergency? Yes, but again, it’s savings.

    So here’s my problem, I have $50k after tax, which amounts to around 1.7 years of expenses in case the worst happens. I’m a 29 year old that has around 62k in the market, $165k left on my mortgage, and no other debt to speak of. I max out my roth, and will max out my 401k for the first time this year. In this economy, I have a hard time putting a chunk of my e-fund into my scottrade account, because I fear the economy is going to bomb and I’ll lose it, yet I know 1.34% in a money market sucks!

    Where is the balance? Am I too conservative?

  34. I have about $16.5K in what I consider my “emergency fund.” I have about another $2K-$3K in planned spending accounts that would be used first in case of an emergency. While all this together would cover me for 8 months of expenses, I have a goal of $18.5K in the account that holds the emergency fund.

    I stared the account in March of 2008.

    I have accessed it once for significant car repairs that were an emergency at the time. I felt so bad about taking money out that I cut my spending to build it back up and opened a separate car repair account.

    I’ve never taken money out for a non-emergency, but I have failed to put my monthly automatic deposit in there a few times when I had larger than expected vacation and Christmas expenses.

  35. How much do you have in it?

    I have about 3K in it normally, right now almost 5K since I sold my motorcycle, and am in a conserving cash mode.

    When did you first establish it?

    About 2 years ago.

    How many times have you accessed it for emergencies? A couple of times for tuition payments, I think. I am about to be dipping in it soon since I just graduated and still don’t have a job…

    Have you ever cheated and used it for a non-emergency? Nope.

  36. 1. I’m like you, $10,000 sounds right to me. I’ve been hovering around $9,000 right now…so close!
    2. This year.
    3. I haven’t yet, but I’m thinking about buying a new (to me car).
    4. See #3.

  37. Every time I come up with an emergency fund, a non emergency comes up that I need to handle and I tap into the emergency fund to pay it down. Whether it be my credit card debt, some family expenses, or a car repair… it always seems like the emergency fund gets used for something else!

  38. One month’s expenses during the school year. 4 month’s expenses during the summer.

    But I also can’t be fired without a year’s notice. If we had regular jobs we’d probably have more in savings. In a true emergency I have some taxable stocks that could be sold.

  39. How much do you have in it?
    10k but I have 13k in a car maintenance/replacement fund. We started a 2nd tier emergency fund with Smarty Pig which acts more like a flexible CD (you don’t get your interest if you close out before the next quarterly deposit). Trying to get the 2nd tier also to 13k. We’d then have 36k sitting there which would be a 1 year e-fund should he get laid off.

    When did you first establish it?
    May 2008 – when we graduated from college (But I had excess student loans in a separate bank account for 6 years before that that could only be spent on tuition and medical problems).

    How many times have you accessed it for emergencies?
    Once, we had done an in school consolidation on my husbands student loans. This eliminated his 6 month grace period so 6 months out of school we got a bill for 6 months worth of payments. Which was contrary to what everyone on the phone had told me for the last 3 years.

    Have you ever cheated and used it for a non-emergency?
    No. We have other savings accounts for periodic bills and Christmas. Once we borrowed from periodic bills when we went to pay cash for our minivan and replaced it the next month.

  40. How much do you have in it? $6,500, shooting for at least $10,000 by March 2011.

    When did you first establish it? 5 years ago.

    How many times have you accessed it for emergencies? We used it for $700 of medical expenses a few years ago but we also contribute to it every month as well. We have no maximum in mind.

    Have you ever cheated and used it for a non-emergency? We zeroed it out a few months ago to pay off our last car loan since we have 2-3 years of expenses in stocks and retirement accounts.

  41. I was just browsing around for blogs to read and came across this. I must say, I love that first commenter’s style. Once I get that next piece of my fund in place, investment income exceeds living expenses. Then it becomes a matter of growth vs inflation, security vs volatility.

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