Do you have an Emergency Fund? And what do you consider an Emergency?

[jasperandchar]

Do you have an Emergency Fund?

And what do you consider an Emergency?

As we all see Emergencies as different things as we are all different individuals from different walks of life - do you consider an emergency a result in a job loss, unforeseen repairs (vehicles/house), some believe it's the 3 most expensive things that could all go wrong/break at once....

As well many budgeters have specific accounts for various things in their lives ie. vehicle repairs, home renovations and on and on, some people have a numerous accounts to cover all the unforeseen, so then what is an EMERGENCY to you?

IF YOU ARE IN A FINANCIAL CRISIS' (HUGE DEBT REPAYMENT PLAN) IS THAT NOT AN EMERGENCY AND SHOULD YOU NOT FOCUS ON THAT VS. PUTTING CASH AWAY IN AN EMERGENCY ACCOUNT WHERE YOU WILL GAIN LITTLE TO NO INTEREST BUT CERTAINLY PEACE OF MIND. OR DO YOU FOCUS ON YOUR DEBT REPAYMENT WITH SUPER HIGH INTEREST RATES WHICH ARE RUINING YOUR CREDIT AND YOUR FAMILIES WELL BEING.....AGAIN NO RIGHT OR WRONG ANSWERS....

Do you contribute to your emergency every payday, monthly, whenever you can spare some cash.

THERE ARE NO WRONG OR RIGHT ANSWERS AS WHAT AN EMERGENCY IS WILL VARY FROM PERSON TO PERSON!!!

[lilo0003]

I picked a number that made sense to us and then put money in monthy until we hit that number. Which we just did this month. Then I started saving for DHs new vehicle. We never had the emergency fund until we were free of the mortgage, I just believed in a crisis we would live of the LOC. I think we all do what makes sense at the time. Personally I look back and ask what the heck were we thinking having once used the LOC during a time of underemployment

[Lynn49]

We never specifically had an emergency fund. Any such things were handled on the spot or on credit and paid off ASAP. We also have a LOC that can be used. We've always put away a monthly deposit into our RRSP that has always been untouchable, no matter what happened.

[cath007]

no...with a tight budget it is difficult....every penny count....I am living on a very little heritage no scolarship and experience for job for the moment,,

[jasperandchar]

We are slowly building an emergency fund- it's a work in progress, there`s not much there at the moment but that`s okay.

Like @lilo0003 and @Lynn49 we have always had our LOC to fall back on in-case something unforeseen happened.

We started last month putting any extra dollars in a emergency account and I know it will be a long journey to get to the amount that we are pleased to consider enough BUT it`s a start.

I will be taking the UCCB which we haven`t received in 6 years and allocating those funds to our emergency account going forward as it`s new $ that is not budgeted elsewhere. I am also putting the difference between certain bills such as Hydro & Bell in our emergency fund and take all prescription reimbursements into the emergency fund as the funds were in the budget and now `free money`.

[lizzie bargain]

I remember always reading you should have 3-6 months living expenses in an emergency fund but I never did that. When I was younger any extra money always went into RESP, RRSP and extra payments against the mortgage. I guess in a sense some of this could be considered emergency-for eg I could have withdrawn from the RRSP in case of unemployment and paid little tax. In fact I did withdraw from my RRSP twice so I could stay home for a full year with both my kids-back before this was the norm- when EI mat leave was 15 paid weeks and in the latest case when adoption leave was 35 paid weeks. I planned to do this both times, as I was lower income during the leaves than when I contributed the $. We still do not have an emergency fund as we are older with no debt so just a general savings pot that could be used as needed if our expenses exceeded our income. But I do agree, especially for a younger family with dependent children and the risk of unemployment etc it is very wise to put aside whatever each family can afford in an emergency fund.

[Shwa Girl]

emergencies = losing a job, furnace broke in middle of winter, basement floods, car in accident, close relative in hospital and you are flying there to help out with their home and such

[macw1960]

A mortgage to pay, RRSP deposits, savings deposits, regular daily living bills and a small but building emergency fund. Happy to say that we have nothing owing on CC's, LOC or vehicles.

I would like to think we would not have an emergency but you never
know about job loss in this day and age.

[wimbly11]

We have some money in an emergency fund, but otherwise no savings, no RRSP's at the moment. We just got our debt repayment plan in place. Once we have handled our debt (hopefully in the next year and a half to two years) we will start putting money into an emergency fund, savings, RRSP's etc

[bobbiegirl2010]

Last year we were in a financial crisis (DH off work due to illness, foolishly spent all of our savings on a home reno, maxed out LOC and had 2 ccs with balances). It was not a good place to be in let me tell you. Luckily we dug ourselves out and are moving forward. I'm determined to get out of debt and stay that way.

To break the debt cycle we were in (pay down the LOC a bit, buy a large purchase on it, lather, rinse and repeat...), we really had to evaluate our finances and spending habits. We had to come to terms as to what a true emergency is and what isn't and wants vs needs. For example 2 years ago our trailer had water damage and we didn't have the money to repair it. We enjoy camping and didn't want to be without a trailer so we traded in the damaged trailer and bought a different one using our emergency fund and put the rest on the LOC. Yes the new trailer was a good deal and better suits our family but this was a want not a need and in hindsight we should have sucked it up and saved until we had the money. After all of our mistakes we are finally on the right path and have not borrowed against our LOC in almost a year.

What's worked for us so far is having a 2 tiered savings system plus allocating all extra $$ in our budget to debt repayment.

We have short term savings and emergency savings:

Our short term savings that is split into different categories. These are expenses that don't come up every month but you know inevitably they will happen (so not emergencies)

- $250/month for vehicles - car, suv, trailer (to cover maintenance, license renewals, and minor repairs)
- $60/month for cats (annual vet bills and flea meds)
- 15% of my income set aside for income tax
- $200/month for kids sports and vacations (I've stopped this deposit when my income dropped 3 months ago. I am going to add my UCCB payment to this account to cover the girls sports for the year and hopefully my income will increase in the fall and we can start adding to this account again).

Anytime we received extra $$ we add it to a separate saving acct for "Emergency Savings". This year we added DH's bonus, vacation payout and income tax to this account. DH receives a large bonus every year so the plan is if no true emergency happens then the balance of this account will get applied to the debt repayment and then we'd keep his new bonus as the emergency fund for the next year.

For us I consider an Emergency to be:

- loss of income
- major house repair
- major vehicle repair

We have life insurance, critical illness insurance and health insurance so we're covered for those situations.

[coupon girl]

our savings is an emergency fund -we add to it every month a bit since I am not working
-I agree with bobbiegirl
-loss of income -ours may drop down dec
-car repair -my brother-law is working on my brakes currently(11 year old car ) both cars paid for (no i won my echo )
-houserepair -our deck was a bit but It is paid off -still need to do the stairs

[beckie.c]

For our situation, I feel like having an emergency fund is mandatory. I've always tried to consider savings as just another monthly bill. DH works for a small business who doesn't have paid sick benefits until disability kicks in after 3 months, also due to some medical issues he is currently unable to qualify for life insurance over and above the minimum amount paid by his employer. This leaves us in a pretty vulnerable situation if something terrible were to happen to him. Although I've recently found out that EI does cover some income loss due to illness. I, on the other hand am well covered for any illness/job loss and have a good pension/RRSP through my employer.

We have a $1500 cash in a separate savings account simply for those 'Oh Crap' things that we know are likely to happen like an insurance deductible, unexpected vet bill, appliance breaking, vehicle repair or DH having to take a week or so off from work.

Then we've set up a fairly low risk investment for our TFSA that houses our actual emergency fund. We contribute $100/paycheck and are working towards 3-6 months of expenses. This is for major emergencies like job loss, extended absence from work, emergency home/vehicle repairs. We currently have just over 2 months worth saved up. I'd also roll a bit of this money over to top up DH's RRSP at tax time so that he doesn't owe any taxes if we didn't have quite enough set aside to cover the difference.

These last couple months have been stressful as DH has been off work for medical reasons and may not be back to full time until September/October. We haven't actually had to dip into the TFSA yet, but I have to say I'm so happy to have a good safety net to fall back on.

By the time our mortgage is up for renewal in 2017, I want to be free of all debt except our mortgage. Saving $$ along side debt repayment fits easily into that plan for us and helps me sleep at night.

[super807]

We have an emergency fund. It has 6 months worth of expenses in it. To us, an emergency is job loss or illness. We haven't always had an emergency fund. When things were leaner, we simply had some savings that were above and beyond our budget.

We have separate savings for other things like vehicle repair, home maintenance and repair, RRSPs and before she started university, RESPs for the kid. Those types of items are part of our monthly budget.

Dh and I have both experienced job loss and illness in the past six years. We've also experienced having my step daughter suddenly move in with us when she was 16, which increased our expenses dramatically, when dh had just started working again a few month before, and I lost my job 10 months later. Plus it took a full year for the child support issue to be fixed, and so dh was still paying child support to his ex-wife, even though his daughter was living with us. It was not pretty. Fortunately, we had some savings, and we have always had a pretty good handle on the budget, so we were able to adjust our budget and cut out a lot of discretionary spending. We had two years of what I called living with "austerity measures". This allowed us to only dip into the savings, not wipe them out. Thank goodness we didn't have problems arise with the house or the cars during that time. We stopped making RESP contributions and putting money into savings. We were still paying off loan for one of our two vehicles, and also a mortgage. We had no other debt. Thank goodness, or I'm not sure how that would have gone.

Any time dh has suggested an emergency fund isn't necessary, I remind him of that period and how stressful it was and the impact it had on our lives and relationship. He then quickly agrees having the emergency fund buys us peace of mind.

We don't expect to have to use our emergency fund, so we have it in investments within a TSFA. We can access it at any time, but in the meantime, it's earning some return for us, far more than if it were sitting in a simple savings account.

[bobbiegirl2010]

I should note that our emergency fund and the money I set aside for income tax are both invested in separate TFSAs (one in my name and one in DHs). They are earning some interest that way but are still accessible. I also contribute $100 per month into an RRSP for myself.

Our short term savings is always fluctuating so that is just sitting in a savings acct.

I feel very lucky that DH was able to return to work fulltime back in January. I ended up losing 65% of my daycare income 4 months later (one mom went on early mat leave and the other could no longer afford daycare for her 2 kids so she has a family member watching them now). I will have these daycare spots filled for September but will have lived off a severely reduced income for 4 months. I am so thankful this did not happen last year when DH was off on LTD or it could have bankrupted us.

[Frugalbigmama]

Yes. I have money if needed. I would be foolish if I didn't have a cushion. I am a saver and planner. And a trip South is not an emergency