Do you have an Emergency Fund? And if so, how many months worth of expenses do you have saved?

[oceanbreeze]

Don't have one and wish we did, however, things will look up again soon and we'll be getting out of debt and socking away an EF.

[wendypsaves]

We're working Step 2 of the TMMO right now, so we just have one month saved until we're out of debt. My goal is to have us there by the end of the year. Then our goal is 6 months worth saved.

[dgarza]

Originally Posted by wendypsaves We're working Step 2 of the TMMO right now, so we just have one month saved until we're out of debt. My goal is to have us there by the end of the year. Then our goal is 6 months worth saved.

Originally Posted by xolesliexo I have an emergency fund.. but it's tiny! I am doing Dave Ramsey's principal however.. and having a small emergency fund and paying off all debt.. after I finish paying off my debt I will build up my emergency fund.. oh what fun :)

What is the Dave Ramsey and TMMO approach? I'd love to have some insight ... apologies for the mini hyjack ... so back on topic ... I have $20 in my savings, this is my EF and I get charged $5 a month to keep it there!!! (Guess I'm heading to the bank on Saturday!) :shrug7:

[judeshoney]

I'm happy to say that we have 9+ months in our EF.

BUT, before you think I'm bragging about that....I'm being laid off in March of this year. My salary accounts for about 2/3 of our household income. And while I'll get a 4 1/2 month severance package, they'll also tax it to high heaven so what I bring home won't be nearly what I'll need for that amount of time.

Right now, I'm not sure if I'll be on the job hunt or becoming a SAHM. I'm going to try the SAHM thing first and see how it works. DH has never had to be the "breadwinner" in our family so we'll see if it messes up with our family dynamic. It's still 2 1/2 months away and he's already as nervous as a priest in a brothel!

I'm hoping that we won't have to dent too far into our EF before I figure out the right answer for our family.

[Ashley72906]

We have about 1.5 months worth right now. We just started the Dave Ramsey plan, took some money out of our savings to pay on some bills! I can't wait to get past step 2 of the plan!

[abond0017]

we have about 1 1/2 mo in accessible savings...

[queenofthehivemomof5]

Originally Posted by dgarza What is the Dave Ramsey and TMMO approach? I'd love to have some insight ... apologies for the mini hyjack ... so back on topic ... I have $20 in my savings, this is my EF and I get charged $5 a month to keep it there!!! (Guess I'm heading to the bank on Saturday!) :shrug7:

Dave Ramsey's Total Money Make Over approach is I believe to save $1000 then pay off debt before creating fully funded emergency fund for 6 months...or something like that. I have a few of his books but not a firm believer in following any one persons plan. I think you have to do what you are comfortable with. For me I thought that emergency fund was pretty important and so I saved AND paid off debt (non of it was credit card debt) at the same time. If you have ever lost your income not having savings is REALLY scary. Not knowing where you are going to come up with rent payments or utilities. Having your car repoed, etc.

There is a good forum for Dave Ramsey fans and I am a member there, but alas I forget the name. Someone here I am sure can post it for you.

That all being said...if you are paying $5.00 a month to keep $20 in your savings account might I suggest that you open a ING savings account? There is no minimum to open the account. They pay higher interest rates than regular savings accounts. They are FDIC insured. Because they are an online bank it takes a few days for you to gain access to your money, which means that it encourages you to leave it in savings. And they make the process of paying yourself every month with an automatic savings plan very very easy.

I really recommend that people give this a try and set up a automatic savings plan to save even just a few bucks a month. When I started I just started saving $20 a month, then increased it as I could. And it really adds up.

$5.00 a month equals $60 a year (plus intrest)
$10.00 a month equals $120.00 a year (plus intrest)
$15.00 a month equals $180 a year (plus intrest)
$20.00 a month equals $240 a yea (plus intrest)

Did you know that if you saved just $30 a month and put it in a savings account that earns 3% intrest that in and kept depositing that every year for 10 years that you would have $ 4192.24 saved?

Of course if you can sock away more than a $1 a day that is better. But just a little here and there really can add up.

[wendypsaves]

Originally Posted by queenofthehivemomof5 There is a good forum for Dave Ramsey fans and I am a member there, but alas I forget the name. Someone here I am sure can post it for you.

Living Like No One Else

[wendypsaves]

Originally Posted by dgarza What is the Dave Ramsey and TMMO approach? I'd love to have some insight ... apologies for the mini hyjack ... so back on topic ... I have $20 in my savings, this is my EF and I get charged $5 a month to keep it there!!! (Guess I'm heading to the bank on Saturday!) :shrug7:

I'm far from an expert on explaining the plan, but I'll try. It's based on baby steps, here are the first three:

1. Baby Emergency Fund of $1000 (an amount large enough to deal with emergencies that you would normally use a credit card for - the BEF keeps you from doing that.)
2. Pay off all debt except house (variations on this depending on how much student loan debt you have, etc.)
3. Fully funded Emergency Fund of 6 months of living expenses

The idea being that if you only have $1000 in savings and are suspending retirement and college contributions for your kids, you'll be super motivated to pay off your debts as quickly as you can. The rest of the steps deal with retirement, house, kids' college, and finally getting to the point where you live comfortably and can give money away as you wish.

[cooktre]

We have two months' worth right now. We're still in Step 2 with a lot of student loans. Lately, with the economy, I go back and forth on whether to bulk up the emergency fund or pay down the student loans (which have very low interest rates although we owe 60K on them!). We don't have any other debt, but I can't decide what's better.