I bought a house last year and try to maintain $10k in my savings for emergencies. I’ve noticed that many people I talk to either don’t have much saved or don’t have a set emergency fund. Personally, I think having an emergency fund is crucial, but it seems like it isn’t a priority for most.
The rule of thumb is to have 6 months’ worth of expenses as an emergency fund. I managed to save that amount and paused spending on a retirement property once I hit my target.
Kumi said:
The rule of thumb is to have 6 months’ worth of expenses as an emergency fund. I managed to save that amount and paused spending on a retirement property once I hit my target.
Consider including property maintenance costs in your calculations. Typically, 1-3% of the home’s value annually should be budgeted.
My partner and I had about $27k in savings when we bought our house. We estimate our monthly expenses would be around $7k if we had to budget strictly.
It’s generally recommended to have 3-6 months of expenses saved. In today’s job market, I think 6 months is the minimum, and having a year’s salary or expenses saved is even better.
Our emergency fund covers 6-8 months of expenses. We hope to reduce some expenses during an emergency, but unexpected costs might come up too. We also have extra in savings for irregular expenses like home maintenance or major repairs.
Honestly, people can be unpredictable when it comes to saving priorities.
We had $50k in our high-yield savings account last year, but moving depleted half of it. Our goal is to replenish it, but emergencies like home repairs, medical bills, and moving have kept us from maintaining that amount. But that’s the point of an emergency fund, isn’t it?
Times have been tough, so I only have about $200 saved.