Do you have an Emergency Fund?

Singapore
November 4, 2008 4:05am CST
I'm starting to build my emergency fund. I'm hoping to set aside as much as 8 times my current expenditure. Do you have an emergency fund? How much do you set aside? Did you have any moments when you had to use them? What did you use them for? Illness? Children? Parents? Yourself? Lend others? Share your experience and wisdom here.
2 people like this
12 responses
@ahgong (10086)
• Singapore
5 Nov 08
That is something I sure hope I can put aside. I am targeting to put aside half a year of salary first. Then ultimately one year of my salary. That is one of the goal that I am trying to achieve. Something I am sure I will be able to do. IT is a matter of time taken to achieve that goal. It is always good to put aside some cash for that rainy day. You never know when you are going to need it. Better to be prepared than be sorry.
• Singapore
6 Nov 08
That is a very high target, but I'm sure you can do it. It's not that difficult if you do it regularly. I think many of us are stuck when the need arises and we don't have the funds to get by. So slowly does it. I hope to achieve at least 8 months worth of expenses. All the best and thank you for your response!
1 person likes this
@ahgong (10086)
• Singapore
6 Nov 08
That is why I want to start with putting aside up to six months first. Then when I am a little more comfortable, raise that limit to one year. This is what I want. And I am sure I will be able to do it. It is a matter of time to achieve it. 8 months is also a good target. But if you can, reach for one year. Then lock the funds in some fixed deposits and let the interest compound.
• Singapore
6 Nov 08
HI ahgong, Do you suggest I put the money in short term or long term FD? How long should the term be? Since it is an emergency fund, I should be able to liquidate the funds quickly, right? What do you think?
1 person likes this
@writersedge (22579)
• United States
6 Nov 08
I had $20,000 American Dollars in an emergency fund. I now have $850 the last time I checked the market. I have been taking a lot of money out to do house repairs and pay bills. I'm very, very worried that I won't get to Chrismas with that little bit on money left. The best memory of taking money out was the 5 thousand I took out for a wedding. Now I wish I had just eloped! I would still have some money left. I have not had employment that has paid me enough to pay my bills from when I left one job in 1998 until 2000 and then I left another job that paid enough toward the last 1/2 year in 2004. Then I got another good job in 2005, but had to leave that at the very beginning (February) of 2007. So since 1998, I have had two years (including the 1/2) year when I made enough money to pay my bills. I was not able to replace more than $1,000 of the emergeny fund and then I had to take out the thousand when I lost my job the last time to carry me through to finding another job (no income at all for over a month) plus I had to take out $500 more to finish the month and start the next month until I received my first pay check. So, GO FOR IT! Put as much money as you can away. I wish I could put some away right now. But instead, I'm worried about how to pay my bills for the next two months.
• Singapore
6 Nov 08
Wow! $20,000 is a lot of money to start off with. I'm sure you're glad you did save it for the times when you needed them before you get a new job and help you to pay the bills. Eloping may not be a good idea, actually. LOL! Since I have no income since this year, I do feel a little insecure. I'm doing freelance writing and I forsee that they will come on and off. So I have to save as much whenever I can. Where do you put the emergency funds? FD or invest it?
@writersedge (22579)
• United States
6 Nov 08
Mostly money market retirement fund, I lost a lot in penalties for early withdrawal with some in savings. Next time I want to do CDs. If I can ever put a thousand away a month, I would like to have them each mature and then I can just pull one out for whatever month I'm short. I can have one in each bank in my area or call around and see who has the best rate and put it there. My husband has a little, too. He asked if he should put his money in 401K or market from work and I said, "Yes." He said, "You don't understand, which one?" I told him, "You don't understand, both." He's so glad he did, one doesn't do anything and he can take the money out easily, the other goes well and he can't take the money out. After my car accident the insurance took months before they paid us, he had to take money out. Writing freelance is hard. Hope your husband gets into saving. Really, really important, if he doesn't think so, have him read this post. Take care
• Singapore
7 Nov 08
I'm glad that you and your hubby saves together. Sometimes men need a little push in the right direction. I'm going to suggest a couple of plans for my hubby and urge him to start doing it. I have to do a lot of talking and persuading, but I think he will listen to me. I know that he's thinking about our daughter and our future nowadays. He just got a promotion and I want him to look into putting extra money away. He's also going to get a couple of bonuses at the end of the year and I have to remind him not to spend on guitars or other accessories. I want to show him how much he would have saved in an amount of time (let's say 20 years) if he regularly puts some money away. I think that would encourage him to save more.
@patgalca (13962)
• Orangeville, Ontario
4 Nov 08
I think if I put money aside for an emergency fund I would end out using it for a luxury item like a vacation. I consider credit cards best used for emergency funds. Our health care is paid for here and I wouldn't lend money to anyone other than my children. My husband has loaned money to friends and has had trouble getting the money back. My mother gave us an advance inheritance when she sold her house and we wisely invested a good portion of it towards our mortgage. We'll be paid off in less than 2 years now. We also invested in an almost new vehicle for my husband because he was always bringing home clunkers that didn't last very long. And gawd! My kids are such clothes hogs. So we have spent a lot of money on clothes. I've had to pull hard on the reins now but with Christmas coming I could end out finishing it off. My husband does have a lot of money invested in retirement funds which we consider emergency funds as he has had to withdraw a lot of it over the last few years.
• Singapore
5 Nov 08
HI pat, I know it is hard to set one up. I have not set it up and I'm already going on vacation; shame on me! I know that I could use the credit card for emergency purposes, but it comes at a big price, high interest rates. I also intend to do without one for the time being, since I have to pay the annual fees. But I found one with 10 years' annual fees waived and applied. Still waiting for their reply. I think you made a wise move to spend your advance inheritance to pay off your home mortgage. We still have mortgage to pay and will last another 8-10 years, I hope we can pay it in less time. I will have to find a way to do that. My hubby does not have much savings either. I'm trying to get him to realise the importance of setting aside funds for our daughter and for retirement. But he is just slow in catching on. I have to educate him slowly. I'm always the one looking out for plan for him. He tells me numbers give him headaches. Thank you for your response, Pat!
@patgalca (13962)
• Orangeville, Ontario
5 Nov 08
We have always paid our credit card off in full every month. Well, at least I have with the MasterCard; I'm not sure about hubby and his VISA. But we have a line of credit which has a lower interest rate than credit cards so if we have to dig into that (which we are way into right now) then we do that. My husband started saving for retirement through work since the day he started working. He is an avid golfer so his dream would be to retire at age 55. But since he has to keep withdrawing from it I doubt that will happen. I don't know how things work where you are but do you have benefits at work that help you to contribute to retirement savings?
• Singapore
6 Nov 08
I pay off my credit cards in full too. I hope my hubby does that too and not get carried away. I'm planning not to use my credit card anymore, except for emergency purpose. Here, if we have a permanent job, you are required to put part of your salary into a CPF account. It is mainly for retirement, but you can also use it to purhcase a home. The company you work for also has to contribute a certain percentage to it. The money there can also be invested, only if you have a large amount. There is also another portion where you can use for medical purposes. Most of the money I accummulated there when I was working has gone into the mortgage of our home. We still have a couple more years to go. I hope to be able to let whatever left of the money there grow in compound interest. The government gives a higher interest for money placed in the account, so that's good.
@yuna15 (2708)
• Philippines
6 Nov 08
AS a matter of fact I do. I'm saving for my daughter's education in the future. In case there is a problem with our health on any of our family members it won't be a problem at all because my company has health benefits for my daughter and husband. I also got an investment which I can use anytime in case there is an emergency.
• Singapore
6 Nov 08
That's wonderful yuna. I'm also putting money aside for my daughter's education. Great to know that your company covers your family member's medical. Very thoughtful of them to do so. At this moment, I'm thinking of a hospitalisation plan for our family. I have some money invested in an investment-linked plan, but I may have to review that one, not doing too well. SOunds like you have everything covered there. Well done!
1 person likes this
@yuna15 (2708)
• Philippines
6 Nov 08
Oh it's a big must for companies here in the Philippines to have health benefits or else their employees will look for some other company. That's what an employee looks for if the basic salary their offering is not that high.
@Metalchick (1387)
5 Nov 08
I don't have a main emergency fund but I do have a car fund which I regularly put money into every month. The cost of running a car is so expensive so I top up my account as much as I can afford every month so that by the time the insurance, road tax and MOT are due I can pay out straight away no hassle. I like to keep a fair amount in this account just incase I have an accident in my car too...if I wrote my car off tomorrow I feel safe in the knowledge I have enough to buy a cheap run around which would probably last me for a few days while I save for something better.
• Singapore
6 Nov 08
That's a very good idea. I'm trying to do that for my property tax and fire insurance which comes in at the end of the year. It's good to know that you don't need to fork in extra money to pay for these annual bills, when you have regularly put them aside. I love the idea. Thank you for your response!
6 Nov 08
Glad I could help. By saving up each week I also find I can save money by coughing up the full fee straight away instead of having the payments for insurance for example spread out over each month.
@Rainegurl (2158)
• Philippines
5 Nov 08
hi, sydney. my husband and i do have an emergency fund, although it's not much right now. we have a hard time setting aside some money increase that fund. we started saving up even before we got married and we have withdrawn a considerable amount from that fund for some reason. but that's ok right? at least we are trying. it's also one of our top priorities. you'll never know when you will badly need money and having such fund would make things easier. have a nice day!
• Singapore
6 Nov 08
Congratulations to you! Very few people have emergency funds. Even if it is just a little, I think you guys are already doing great working together to have it set up. It would be nice to know that when you need the cash, it is there for you! Thank you for your response!
@royal52gens (5380)
• United States
5 Nov 08
No, I don't currently have an emergency fund. I know I should. I used to have a good amount set aside. I then fell upon hard times and had to use it. Now I have to rebuild it. It is very hard to build it up.
• Singapore
6 Nov 08
Well, that is what the emergency funds are for anyway. At least during those hard times, you had something to depend on, even though it's all gone now. If you have started an emergency fund, I'm sure you can do it again. It will come in very useful at unexpected moments in our lives.
@nanajanet (4437)
• United States
4 Nov 08
We have funds in a Roth account and in a 401K. We are just working on getting just a regular savings account. Every time we do get ahead to save, something big always comes up and we have to spend it. But God always provides!! LOL
• Singapore
5 Nov 08
Hi Janet, That's great that you're saving up for your retirement. I have read about the Roth and 401K accounts from Suze Orman's books and I think it is a great way to save for retirement. Over here we have what we call the CPF. Part of our income goes in there and the money cannot be used (except for buying a house or education). Company also need to contribute a percentage of our income in there too. There are three portions, normal savings (for home and ed), special (investment) and medical (hospitalisation expenses). The money will come out when we retire, but some people finish them off before then, from buying a house they can't afford. Some even need to top it off with cash. I use the savings in the CPF to pay off my mortgage together with my hubby. As long as what comes up is a real emergency, well that's what the money is for. But if it is for some luxury item, I think we need to consider using the emergency funds. Yes, God help us find a way. Thank you for your response!
• Philippines
4 Nov 08
Very nice of you to do that. It's hard here in my place to save. Everyday, most people try to make ends meet. What most people earn is sometimes not enough for daily needs.
• Singapore
5 Nov 08
Hi mystique, I understand how it is like. It's difficult if you don't even have enough for daily needs. In this case, I guess daily needs will have to take priority over the emergency funds. But any extra earnings should be put in savings. That is why I see a lot of your countrymen travel all over the world to work. We have a lot of Filipinos here too. All the best! I hope mylot helps easy your burden a little. Finding money making techniques online may help you too. All the best and thank you for your response!
@subha12 (18462)
• India
4 Nov 08
frankly speaking now I do not have. i made one but the money got exhausted,. main part is that the I am only one to contribute there. so its hard to maintain
• Singapore
4 Nov 08
Hi subha, I know it's hard to get others on board the idea of having a good financial system. I'm trying to set up an emergency fund on my own too. And it's not easy. But slowly, I'm going to get my husband to join me too. I think it is important that we work together. Anyway, if there is a real emergency, that's where the money should come in. So both of us should be maintaining it together. Well, don't give up subha, put them aside bit by bit. I'm not working, so I have to scrimp and save to have it started. All the best and thanks for your response!
@academic2 (7011)
• Uganda
15 Nov 10
I think that is the way to do. Many people do not have the culture of saving, and when emergencies strike, they completely find themselves at a great loss!
@puccagirl (7316)
• Israel
22 Oct 10
I do. I even have two to be honest, one a bit smaller ($1000) that I can access very easily (meant for smaller emergencies) and one bigger, where my goal is to have 6 months of salaries (I am still working on that one, I think I will have that in December this year). I never used any money from them so far, thank god!