EF Goal=$12,000
Last week, I discussed why I need an emergency fund. I thought I would also address why I'm shooting for a $12,000 emergency fund.
I created my $12k goal because I would like a 6 month cushion. With the economy and my specialized skill set, it could take me a while to find another job. Since I'm single, my savings would be my only option to fall back on.
If I did lose my job, I would cancel my gym membership ($30/month), cut out retirement savings (~$700/month), cut back on food spending(from $200/month to $150/month), and stop adding to my savings accounts (down payment account, emergency fund, travel fund, gift fund). However, my health care costs would increase by over 200% with COBRA (from ~$80 to ~$400). I would need about $1800 a month if I cut back, but kept my health care coverage. This would also leave about $200/month for travel. I'm not planning on taking vacations, but I would probably need to travel for job interviews.
7 comments:
I think that is a great number to shoot for. Mine's $10,000, but I don't pay rent or a mortgage. As single gals, we need to make sure we can take care of ourselves in emergencies.
My goal is 15k, mainly because my rent sucks. I'd probably have to move and get roommates if the situation was really dire.
It sounds like you really thought it through.
canadian saver, I'm super jealous that you don't have a rent or mortgage!
stackingpennies, I would also have to look into down grading my situation...but I live in a 1 bedroom apartment right now...
That sounds great! :) I think it's an awesome goal and "in case of emergency" game plan.
I am a 40 year old undeveloped egg. I suck.
I congratulate you for figuring this out now, instead of when its too late.
I need a good EFund for many of the same reasons. Even though I live with my BF I still think I need to save as if I am single just in case ;)
Sounds like a good plan to me. Have you done the math on how long it should take you to get funded based on the amount you plan to throw at it each week, month, etc?
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