How Much Should REALLY Be In Our Emergency Fund?
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- čas přidán 18. 08. 2021
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Hi, I have a question please, I'm from the UK, just want to say I love watching this show, I always learn something! Is it better to pay off credit card debt in larger amounts for example £1000 at a time or £50 here and there? Thanks x
Wife and I paid off our home yesterday and I can’t put into words the feeling right now!
Wow good for you, I’m nearly there, cannot wait to feel what your feeling 👌👌
Congratulations!!! Its only upwards from here!
Congrats!
Bravo.. 👍💯👏
Congrats!
"The more money you have, the less true emergencies you have." Love that Dave quote, it really shows that money can act as a tool, and having the right tools can prevent you from getting into bad situations.
Another thing to consider Courtney is inflation’s impact on your buying power over time. I know Dave says all the time not to worry about inflation, that the money in your emergency fund is serving a purpose. I intentionally drove down my monthly living expenses so inflation would have less of an impact on me. I’m debt free now (including my house), which lets me keep a one year emergency fund ($30k) with lower fears of inflation. It also increases cash flow, allowing me to invest more and make gains, countering inflation. Love the videos, keep them coming!
Former employer always said that money is just a tool to do what needs to be done.
@@joshuajohnson9936 Yes! Inflation is so important to consider (especially where it is now and where it could be going). Congrats on being debt free, that's a huge step! And thanks so much for the support! 😊
Dave is right. With a good plan, inflation is nothing to worry about.
That’s obvious. Money fixes problems. That’s the reason we all want it. It’s always been like that. The only problems rich people have is family issues. Everything else gets fixed with money
I've left jobs and when I bumped into old co-workers on the street they bear hugged me and exclaimed! I'm so happy you escaped that awful place!!!!
😂 Ive had a job like that!
Same 😂
Do door dash and Uber. Fire your boss.
Same! And Almost five yrs later I’m soooo glad to have “escaped”
Our emergency fund is enough to live on for one year within our usual budget. I also started an upkeep fund & a future car fund.
Might as well invest the rest.
Very smart! I do similar - have an emergency fund, then a car repair fund & car maintenance fund alongside it.
🥰
How muchis good,
This is actually an interesting topic.
I am now restarting from zero and my salary has halved but I am going to make efforts even if it's 20$ a month in. Better than nothing 💪
That's a great start because saving and investing is more about establishing good habits than it is about the money. Rock on1
@@beyourbestselfeveryday391 💕
I started with $3 here $5 there. It works. Stick with it.
It is also helpful to have the amount you want to save taken out of your account into savings automatically, and also a little can go right into savings from direct deposit. It is very helpful, and you won’t miss it.
With that sort of determination sounds like you've already won the race, congratulations and good luck !!!!!!
Emergencies always occur in threes…or more. It’s never the hot water heater broke, the timing belt went, or the refrigerator quit…it’s typically all three within two weeks.
😂😂😂😂😂
Very true indeed.
This is absolutely true. I went from never having to use my emergency fund to having it wiped out when I had to replace my AC and do two expensive car repairs.
I really feel like 2021 is demanding bigger emergency funds. 🤕
I did 4K bare bones 2-3 months of expenses incase SHTF….booming on debt repayments now.
aheh...things have gotten worse
@@andyvoice
You got that right.
@@nicolefaring98 I have no idea what you just said 😁 what did you do again?
Wait until you see what happened in 2022.
This is a good question, great question really
money is fun.
The savings account being a put and take account is MY LIFE RIGHT NOW
Dave, you just taught me a distinction I did not have yet. I have listened to you off and on for years, and never quite made that distinction in my head, about the difference between special spending and emergencies. I am going to make a change right now on how I categorize and spend my money. That helps a LOT. I am not naturally good with money and I have to mentally work on it all the time.
Where are all the likes? Agree 100%, I will do the same.
Second part was the best, need to get into the mindset that every dollar you have needs to have it's own purpose.
I love this stuff. Be aware. Have a plan. Have a purpose. It's not about wealth but about being able to decide. Thanks Dave!!!
Good question by the caller, and good explanation. “Retirement” is just an option. Put your money to work, even the savings.
It's not an option. Retirement is something you have to have for your later years. Social Security is meant to be a supplement, not something to live on.
Dave is so right! Having a mission for your finances essential. I don't think I'll ever have it correct but I like to choose one main task to save for and Chase that until it's done!
I don't know how I just found this show but I love it already!
Lols welcome, some of the calls get pretty crazy...😂
Welcome in!
Welcome aboard! Pleased to have you
Welcome! You have just entered a whole new world! I have been following Dave for about seven years now. I had $130k in student debt and barely could breath. Today, I am debt free and I am building up my retirement account. Join the club, drink the cool-aid and get gazelle intense. Really happy for you!
Woohoo!
So my EF is going to actually be an Emergency/Transitional fund..Putting away three years of benefits before I take my pensions fully to improve/upgrade my lifestyle.. The second and third years "of benefits" are going into mutual and index funds
I love what he said about always giving 1,000 percent.
I'm paranoid so I feel there's never enough
I love this man! God bless him and his family
Had my brother come visit us a few months ago. I let him drive my 2014 F150 for the week. He couldn’t get over how “smooth and quiet” it runs and how it’s in great shape. I told him simply, no deferred maintenance.
Love savings accounts - definitely do line item breakdowns for various savings pots 👍
That’s a good question and I learned a lot from this podcast
Maybe in addition to the emergency fund you need a seed fund. Seeds will grow into a new car, bass boat, Christmas, Birthday, Holiday some new toy.
Love the term!
Love you Dave!
Ive been going about it as I don’t want my lifestyle to change much with my emergency fund (im planning for if I got laid off). So im saving for my rent/mortgage payments, food, spending cash, monthly memberships. I dont want my life to change much when an emergency happens
Great Question!!!! and Greater answer!!! Thanks!
@ Dave n Ramsey Show Team..Great analysis and great tips!🎉
Between $20K-$100K will be enough for emergency funds as long as not spending those on any kind of entertainment or vacationing in other countries.
This was the exact question I had too!!! Awesome!!
I think of it as a 3 accounts. Checking, slush, emergency. The slush should be way bigger than the emergency. It can be moved into the checking. The idea is the emergency fund is TRULY an emergency. And to Dave’s point as you make more and more money it’s hard to envision true emergencies you couldn’t cash flow or “borrow” from your slush fund
Ur moms a slush
Elaborate, please
Great call!
Good information
I love ur advices always
I'm making myself get up for work every day. That's a new concept.
Watching from Kingston Jamaica
Thank you
Me too!
I have a two year working capital fund, sounds excessive but my job is always in jeopardy. I have been let go because of corporate downsizing or merger at least five times. Since I am an older worker it seems I am the first to go. I have a high in demand skill set and have been able to make due with contract work during layoffs. Knowing you have two years, plus contract work allows you to look for the "right next job" and not take the first thing that comes along. Also, now that I am on medicare, we don't have to worry about health care insurance. One day I will just do contract work, but I do like having a six-figure job with a stable paycheck. Most firms will let me work out of the home so they often don't notice how old I am.
I LOVE THE RAMSEY SHOW!!! :D
I needed to hear this
Oh I love the integrity in this Show !!
"You are not someone who mails it in"... The caller literally said that her performance is an issue there because she doesn't like the job. So, yeah, she's someone who does mail it in. People will tell you and show you who they are... believe them when they do.
I was behind Dave Ramsey 100%, right up to the point where he said a bass boat is not an emergency. How dare he!!!! Lol
LMAOOOO! 🤣🤣🤣🤣🤣
I always thought a strong one year emergency fund is always good to have if everything else is in order financially.
@Austin Duke piece of mind. Better to have more than you think you need rather than need and not have
@Austin Duke
Fair enough.
@Austin Duke that's why you invest in liquid accounts. Duh?
@@Scott-got-caught amen!you can never have too much money
@Austin Duke FOMO can be a trap. Beware.
1:90 is great point. I haven't ever used an emergency fund. A $2k cost is just absorbed in the monthly budget
It’s easy to say what John says.. but really, it’s not like that if you’re in the position
He's no Dave, and tries so hard. So terrible. Lol
I love the part about the worth ethic! I always give my 100% no matter what.
I love how she mentioned her nails👍🏼❤️🤗 priorities!!
I haven't listened to the whole thing yet, but if I'm job hunting, I'm at least getting my hair done. For interviews, but also for my confidence.
Hahahaha! I need an emergency bass boat! I literally laughed out loud!
Dr. D is the bomb
Thank you brother!
If you hear Dave say "bass boat", it's a good clip. 😂😂
Well Yeah! If u have money then it's not an emergency anymore! Especially now where everything u buy or consume is Unreasonable! Everything INFLATES except paychecks.
The more you save for the monthly expenses, the better off you'll be when youre in the emergency phase. 🙌🤘
3:25 , lol 😂
SOL
She hates her job join the club lady.
Ah yes welcome to jobs
I love mine!
An overarching theme is "Being Mindful With Your Savings"
If the forced arbitrary shutdown of small business at the whim of some Governors has taught us anything, maybe one to two years of emergency fund may be needed.
Small businesses received quite a bit of stimulus cash.. Calm down.
Amen!
@@superblump87 Dave was not a fan.
@@superblump87 and it was nothing compared to being open for business, you probably dont own a business tho
I'll never understand how you can earn 160k and be in financial trouble
Bad management 😄
People don’t know how to manage their money
Your statement is relative. I agree because I only make 100k. I'm sure there is someone else barely making it on 50k that could say the exact same thing to me making 100k. Lifestyle creep is real 😂
My savings account is don’t touch account.
Good video. Didn’t answer the question however
My emergency fund is for job loss and needs etc. Like appliances breaking and auto repairs. Is that the right way?
Yes . Everything that can happen unpredictable. If you still can afford to pay for it with your other money , do it this way . It’s really for emergencies
Emergency Bass Boat purchase: When you live in a flood zone and you hear heavy storms are headed your way. Just pointing out.....
These people calling in with $160000 incomes !!! 😳
Houston Texas stand up
This show has really empowered me.
All the way from Nigeria
Thanks Dave
Quit scamming Americans
@John Sutula 😂🤣
Saying you’re from Nigeria is nothing to brag about
I'm single no kids active duty and have very little monthly expenses. On top of my head all I have for fixed bills are:
$40 cell phone
$30 car insurance
$13 YT Premium
$5 Peacock
How much should my EF be in that scenario?
Save as much as you can! I'd say live on 10%-20% and save the rest!!
Depends on where you’re at in your military career. You don’t need much of an emergency fund if your years away from military retirement age. And at worst case, if you got chaptered out for any reason, that’s like minimum six months to get your s*** together and scramble together some emergency savings money. So as far everything else, think about loading up your income into index funds. And see how much you can put into your TSP
@@SnowyCountryChicken Live in the barracks, graduated debt free and my car was paid off years ago. I also Doordash as a side hustle when I'm off duty, making at least an extra $1k/month and that pays for gas itself.
We just gonna act like they are not describing the “Ally Buckets” 😂
I love that my savings account has buckets so I can dedicate a bucket to emergencies and then dedicate other buckets to other things.
Lol but at the current inflation rate you are loosing more every year than you realized smart people grow that money not sit on it and wait for inflation to eat It up
Do yourself a favor.. Instead of a "typical savings account".. look at the interest rates and see if you can do better with a CD Ladder..I get the concept of money that sits in the bank isn't getting the best opportunity, but a CD that gets 4-20 times the earning power, AND the interest payments are paid directly into savings has the higher interest rates empowerment with a huge degree of protection..So what if you do have to liquidate the CD..Usually the Early Withdrawal Penalties are a matter of months to a year of "interest earnings".. What if you had already had that CD for three years dribbling change into your savings account??..You still would have earned two years of interest.. even if you had to payback one year of interest....
Ahh so use use allly
@@kevinrehberg8758 that’s stupid advice just buy and index fund
The emergency fund is insurance, not an investment. Like any other insurance, it costs money. Add a bit to the emergency fund every year to deal with inflation. Money above the emergency fund is what goes into growth-seeking investments. For the emergency fund, safety is the priority, not growth.
Does it factor in obtaining unemployment benefits?
One income and pay the bills gasoline and groceries account…. One savings for new car account.. one savings for vacation account…. One savings for safety account. One savings for future child account . And one easy/medium index account for your maybe early pension in future. Do it like this and you will be fine.
my exes are trainwrecks, all my friends moved away. I got a big nest egg tho!
Great point made here by Dave. I have six months money saved up, and sometimes I’m tempted to put it into my S&P index fund. But then I hear Dave smacking my chops…..”the S&P index isn’t an emergency….are you dumber than a rock?’ Ok…soz Dave.
I still ignored it and put it in lol. Why wait when I could build wealth with that
Great time to put it in now
Sounds like Dave is saving to build a hospital one day. Fair play 🤝
Put and take account is a savings account
I like that
as much as possible in emergency fund.
I think if it's about to flood, a boat purchase could be an emergency purchase
As much as possible
I wish Dave would talk about this more because so many of his followers think they just need to save $1000 and then they're good to apply their money elsewhere. Every ANTICPATED but not monthly expense needs to be included in the budget. I forecast what future expenses will come up and when. I'll need new tires every 4 years. I expect inflation to increase my gas and grocery bills by some % every year. I'll probably spend $1000 per year for maintenance and repairs on my 20 yr old car. Kids tuition and property tax are paid once a year...etc. Then I prorate that amount into how much to save per month to be ready for those expenses. I have two savings accounts - one for emergencies and one for periodic expenses. That way I don't go screeching into December with a large tax bill looming that will wipe out the cash in checking account normally designated for routine living expenses. (or dip into emergency fund)
So glad I got a 10k emergency fund, the ac went down and its gonna take 2k to fix.
Praise the lord 😅
Dave... What if there is a zombie apocalypse?! The bass boat will be essential! 😂
You are assuming zombies can not swim
I recommend every household saves up 50k emergency fund before anything else!
Don't think I don't see that M1 MacBook Air over there 😜 yep I have one... And yep!! Am debt free and bought it CASHIOLA BABY!!
I sold my laptop and phone for a total of 850! I'm getting somewhere!
I have an 85 month emergency fund
Good question, but there's no answer to it because it's subjective.
How much should you keep in your checking account? Aside from having an emergency fund?
I like having 2500 to 3000 in checking..just a personal preference as to what feels like a buffer for me.
Step 7 in 4 months. Think I’ll wait a little while before becoming too giving. Still need to be better at budgeting.
Put & take out & take no get a transition fund sinking fund love that
Sounds good more accounts 😐 with reasons 👍 for it
A bass boat purchase is only an emergency once you find out your mother-in-law is coming to visit.
Where I live a boat can definitely be an emergency purchase. Southern Louisiana.
Bass boat might be an emergency if a flood comes lol
the emergency fund for people on disability is going to be universal basic income coming up soon
I spend wayyy too many years with savings accounts doing nothing, such a shame, but this was what our parents told us to do: don't invest, it's risky. I wished I had built my portfolio 20 years ago
There's still time? How old are you?
@@pinkowbs 41
@@CrappyProducts you still have time and another 20 years to "retire". You got this✊🏽
@@pinkowbs absolutely, I will still be a millionaire, just wished I would have done it earlier
AMAP
I had attorney advise me to go bankrupt. he said I know what best for you. I fired him.i don't believe in bankruptcy. Everyone was repaid. Thank you 😎
My father in law has always said that he is "saving for the future." He is in his eighties now and very reluctant to spend any of the substantial money that he has acquired because it is "for the future."
So is he going to take all his money with him into his grave?
Ok, so how much?
Great content, what should your emergency fund be if you make $100k/yr?
Something to ask yourself is, "What are my monthly expenses?" An emergency fund should be based on your specific needs. Also, keep in mind that if you want to cover job loss with your emergency fund you may want to factor in an extra $1,000 or so per month to pay a health insurance premium. After what I've been through the last few years I'm going to strive to have at least a 1 year emergency fund just for peace of mind.
I understood the concept of a "transitional fund" and how an emergency fund could be mistaken because of the uncertainty of the "transition." But maybe I missed it because I don't think the question was answered. How much should be in your emergency fund? Does it depend? I heard Dave say to a caller on a different video that his emergency fund of $11 - $12 grand was meager (I think the guy made $180 a year and he was facing over $60 grand in debt). What does an emergency fund of 3 - 6 months look like?
Yes, bare bones