Emergency Fund

[rosarugosa]

What do you favor for an e-fund - cash, CDs, buried in the yard, HELOC, other?

[lessisbest]

We keep some cash on hand, which is suggested in every emergency plan, like this one from FEMA - http://www.ready.gov/document/family-supply-list. There is also a small savings account we call the Christmas/Emergency account. This is where I deposit money each month from saving $1 bills and the $20 budgeted for my hair cut each month (but I cut my own hair), as well as "found" money - monetary gifts, rebates, garage sale, metal recycling... We have enough money to cover 6-months of expenses in a CD.

I would also include our home food storage as an "emergency" fund, as well. We have enough food for a year in the pantry portion, and enough for 3-years of the "Seven Survival Foods" (grains, seeds for sprouting, legumes, salt, sweetener/s, fat, powdered milk).

[kib]

I have cash at home, about 2 months of basic living expenses. I keep a cushion of about $3,000 in my checking account, which serves as operating funds between deposits and provides overdraft protection, but could be drawn down in an emergency. Finally, I have a series of small laddered Cd accounts, set up that way so that I wouldn't have to pay more in fees than absolutely necessary.

I think it all comes down to what you are thinking of as an emergency - a personal emergency like losing your job, which doesn't require cash in a shoebox, or an environmental / social emergency - flood, war, which might.

[bae]

I keep several months' of living expenses in cash at home in a vault that hopefully will be accessible after an earthquake or wildfire. Another month or so in cash in the safe deposit box in the local bank. About a month's float in the checking account. Several months' worth in deposits in an out-of-country bank. A week's worth in my pocket.

[ApatheticNoMore]

CDs mostly, I have one of those CDs you can withdraw from anytime without penalty, and another 1 year CD. I have a cushion in my checking account as well - though that's mostly to make sure I never overdraw it, and rather small amounts in savings and money market accounts. That's maybe a year and half - two years of expenses. Other than that we're talking things that ideally shouldn't be tapped for an emergency like mutual funds etc..


a personal emergency like losing your job

yes this is the main thing, and I can't imagine it not being the top priority of anyone who needs to work for a living, every recession there's layoffs

[SteveinMN]

Some cash around the house, some savings accounts (different banks to address a single point of failure), some CDs. Line of credit in case we just want to shift when we pay for something huge.

[Birdie]

I keep a couple of months expenses in my checking account, $5000 in an attached MM account and $40 - 50K in an online savings account. Everything else is invested that I could sell if I needed more. I also keep $1000 in a safe at home and a few hundred for groceries or whatever.

I used to have a bunch of CDs but decided to invest that money and just keep the amounts indicated easily available.

[Blackdog Lin]

Three months bare-bones living expenses in cash secure at home. (if it's not on hand, in hand, it's not really yours.) Another months worth in the safety deposit box at the bank. And another 15 mos. worth in a basic savings account in a local bank. And a little cushion month-to-month in the checking account. I believe in diversifying.

And as lessisbest pointed out, a nice "bank" of food, water, and essentials storage is important, if not essential.

If a loved one were asking me this question, I would say (1) have 1-3 mos. basic expenses in cash safely stashed at home; then (2) the bank of food, water and essentials in storage at home; then (3) a larger monetary amount (3-12 mos. basic expenses) in a liquid account held locally, like a local-bank MM or savings account fund.

[ToomuchStuff]

Six months in a savings account. Emergency 20 in the wallet (doesn't count my normal carry cash, or gas cash). Access to money elsewhere.
I'd like to keep some more at the house, but there was some other stuff going on around my neighborhood, the last couple years, I was sure it would be an issue.

[artist]

What do you favor for an e-fund - cash, CDs, buried in the yard, HELOC, other?

I use a money market account with a debit card attached to it.

[jp1]

Super short term I keep a few hundred in cash in my day to day bookbag that I carry everywhere. (It's got a secret pocket that I didn't even discover until I'd owned it for almost a year...) Beyond that I've got a little over a month's living expenses in cash at home. If we truly have a SHTF scenario I'm hoping that we can delay paying the next month's rent with it so that it will stretch further, but if not, the money's there. Also have an ounce of gold at home that I recently inherited from my father. Not sure if that will be useful, but it wasn't a conscious decision on my part to get it, it was just there when I cleared out his apartment a few months ago. Beyond that another couple month's living expenses in my checking account with a major bank that has atm's EVERYWHERE. It makes the money accessible if we have to bug out from a localized disaster (earthquake being most likely since this is California) and it prevents me from having a monthly fee for the account.

[Rachel]

2 years of living expenses spread out among 2 gov't insured banks, some money market, some savings, some CDs. And enough cash at home to buy a train, plane, or bus ticket out of the city and eat for a few days. I'm kicking myself now that I didn't realize much sooner that I could have been buying Roth IRAs all along and using those as emergency funds.

[rosarugosa]

Thanks for the input everyone. I think I'm going to start setting up a modest CD ladder with Barclays (2.25% on a five-year CD) with some of the money we keep in online savings. Not great interest, but better than the 1% online savings. We're fairly aggressive with our 401K and IRA investments, so I'm willing to accept lower returns with some of our assets in a lower-risk environment.

[Tammy]

Have you considered index funds? Much better interest there.

[rosarugosa]

Tammy, yes, most of our investments are in index funds. I though the bulk of our e-fund should be something with less risk.

[rosarugosa]

I put the first rung in place for a CD ladder with part of our E-fund. My plan is a 10-rung CD ladder over a span of 5 years.