I love how using YNAB regularly changes your mind set, making a peace come into your life. I was taught if having an emergency fund will create emergencies in your like. I named mine, “Rainy Day Fund’ .
I have a few true expense categories for smaller ‘emergencies’ like one for unexpected medical costs or for broken appliances, and one big emergency fund called Zombie Apocalypse for the big stuff (like job loss or a house fire). The name reminds me not to take anything out unless there’s an actual Disaster going on.
Well, how convenient will it be if an actual zombie apocalypse occurs. You'll be one of the few that's been budgeting for it. World: 0. Marleen: 1. -Hannah 🌻
My main "emergency fund" is still building to 6 months of expenses, but that will soley be for job loss. The "true expense" funds are earmarked for those smaller emergencies like car repairs, home repairs, medical bills, etc. I like keeping it separate like that so I know I'm covered no matter what. Honestly though, the important part in all this is to not go into debt. So just make sure to have enough liquid funds to cover what may come up and it doesn't matter how it's split out.
Started an emergency fund in 2019. Before that I was just counting my "savings fund" as something I could dip into for emergency purposes, but I prefer the separate fund. Figured out the amount I need each month to cover only the bare essentials, and am now at a 4-month emergency fund. Aiming for a full year :)
Emergency fund is "built in" to YNAB. Simply budget money to each bill category (or any category) months into the future. You just have to spend less than you make (which you should be doing anyway). It feels good to see that you have your auto insurance, gas bill, phone bill, internet bill, home mortgage taken care of for the next 3 months. If your expenses are $2000/mo and you are fully budgeted/funded 3 months into the future, you have an "emergency fund" of $6000. Borrow from future categories to pay for your emergency and then build up your budget categories into the future again. Though it probably is a good idea to have a separate emergency fund in the beginning for new users to get that sense of security.
What perfect timing. I just today passed the thousand dollar mark in our emergency fund. Felt so good to see that since that was a goal of mine. I agree, I have a ton of other true expenses that are mapped/planned out and those are the ones that always put me in the worst position financially. I like the idea that Jesse had in a recent podcast where he said to not spend the money in the emergency fund but to move it to which ever category you need it for so you can always reference back as to what happened.
I have repair funds so my emergency fund is more about job loss than anything. I don't do the budgeting months ahead, it's too complicated, I like my life simple. Budget then have a pile in savings.
I like to keep both an emergency fund category containing 3 months of expenses + am a month ahead. I like to keep them separate simply because in the event that something that I haven’t budgeted for suddenly happens, I’m not having to scrounge through my categories to cover the cost. I can simply pull from my emergency funds category, then replenish this over time while also building out a new category to cover when/if that sudden cost happens again.
This ^^ 🙌 I feel like this isn’t really brought up much. I’m budgeted of a full month ahead and I have an emergency fund with 3-4 months of expenses in it. In the event that something happens, I don’t want to have to pull money from future categories. Plus, I like the idea of having a category that tells me my net positive/negative for the month. So if I need to replenish my emergency fund, it’s easy for me to know exactly by how much. Cheers!
I started taking control of my finances this January, so my first focus was to build a small emergency fund, now I’m paying off debt while slowly funding my true expenses categories and then I’ll keep adding to my emergency fund. I feel better having both areas covered.
I have an emergency fund of 3 months worth of expenses, following the general advice of having 3-6 months. Definitely changing the name to “prudent reserve” after watching this video though lol. I personally think having an e-fund is essential. The reality is, you can embrace your true expenses, but there will always be truly unexpected events that will happen to you (i.e. job loss due to COVID), so you must be prepared for those events.
Here is one another reason to have an emergency fund (warning - it can hurt feelings): If/ when your love one dies, her/his bank account gets frozen, same if the bank account is a joint one. It could take a while before you can touch the money at a moment where you are overwhelmed, specially when the event was not expected.... So in our couple, each of us has an emergency fund to help get through this terrible event.
Podcast form audio only would be a great addition for times when listening is better than watching. Would prefer to not stream video in the car, helpful for those without unlimited data plans.
Thanks to YNAB, I do have multiple sinking funds accruing funds for “emergencies”. But I do also have the $1k fund for peace of mind. Nice buffer to have. After getting rid of debt I can build it up to 3-6 months of expenses...or age my money quite a bit - get 1-2 months ahead on expenses.
I have an emergency fund with 3 months of income (after taxes). I don’t feel like I need more than that due to true expenses and my circumstances (steady job, etc.) but it’s definitely different for everyone.
I am building an emergency fund because I'm also still building my true expenses. Once I've built those up I'll change it to an income replacement fund and work on increasing it.
This has me thinking if I should just change the name of my emergency fund to savings. I have a category called budget cushion which is only to be used if I am over in a category. I have a category for medical, home repair, vet bills and car repair which I think are the major emergencies that can come up so may just re-name it to savings. I love the freedom we have to name and rename categories. Thanks guy.
I've been diligently saving 400 dollars a month in my emergency fund, but I realized that what I am actually trying to do is save up enough money to replace my septic system in the house in case it fails. So just gonna calculate it as a true expense, that way I dont raid it (plus the lock emoji- cant touch it!)
I'm definitely in the EF camp. A blown transmission and a tax bill from Uncle Sam in the same year reminds you of how you can never plan for all the headaches that will bust the best budget.
I'm uber risk-averse, so I have 8 months living expenses in an emergency fund, then another 3 months worth in my car replacement and home maintenance funds. Unless I lose my job *and* accidentally fly my car into the windows of my high-rise condo unit in the same 3 month period, I'll be ok! I'll just stay far, far away from Mr. Weasley and his Muggle contraptions 😆.
Automatic paycheck deductions are another great way to build an emergency fund. I set mine to go into an account that's not connected to YNAB, and usually forgot about it. When I took money from it, I considered it a loan and always paid it back asap. I just moved across the country, so lately I've dipped in pretty heavily to create a Launchpad Fund (first rent, utility fees, unexpected moving costs) and House Upgrades (mostly furniture). I still keep about $3K in my Emergency Fund in case the sky falls, but the rest of my spare cash is focused on setting up my new house. I also have a Rainy Day HYSA that I never touch, also funded through automatic deductions. That's earmarked for a down payment someday, but if I had to I could move it to cover a crisis. I usually forget it's there. For me, long-term savings is all about automation.
I have an emergency fund for a full months expenses etc because my husband has had 2 spontaneous lung collapses in the past 4 months and when it happened it was unexpected time off work etc and having that money there just makes us feel less stressed. We’ve now also been sure to fund the next month (so close to being fully funded) but before we were so focused on debt that we didn’t have money set aside and it really hurt us.
I had an emergency fund when I started YNAB, but I've made some adjustments to it. The bulk of it is my Income Replacement (for three months expenses should I lose my job), and then I shifted some to my sinking funds where I felt it would be more useful. But I also have a lot of "buffer funds" built into my budget, and I use some goals to save up a little extra in spots. I have been just on the verge of being a full budgeted month ahead and I should finally accomplish it next month with my third paycheck, at which point my goal is to get up to six months expenses saved JUST IN CASE.
I am using an HSA as an emergency fund. I didn't like the HSA that my job opened for me because of the fees and limits in investing, but I found out I can open my own as long as I'm enrolled in a qualified "high-deductible health plan." So I opened an HSA with Fidelity, rolled over the money from my other plan, and started paying out-of-pocket for my health expenses. Anything I take out of the HSA is tax-free and has no penalty as long as its a qualified medical expense. Of course there are some emergencies that are not health-related. The way around that is that there is no deadline for reimbursing yourself from the HSA, so I just save my receipts. So the money in my HSA grows as I put more in and the investment grows (an index fund), and the money available to me to take out grows as I pay more out of pocket for health care and my "shoebox" of receipts gets larger. If I can cover any "emergency" through my true expenses, I will do that, because of the tax benefits and compound interest of the HSA. I'd love to save that until retirement. As far as YNAB goes, the HSA is a tracking account, so I don't have a category for it, except for when I contribute to it.
I keep our emergency fund as 3 months worth of living expenses. I don’t use it for unexpected bills, we like to have in case of job loss, serious illness etc. Anything where we could lose our income.
Two days ago my heat pump was speared by tree limb. We called the HVAC guy, he came out and gave a price to fix it. I had half in my home maintenance category and took the other half from my emergency fund. The lack of drama and anxiety was... Unprecedented. Truly, this was a complete non-event. As my daughter would say... I was shook.😂😂😂😂
Windfalls: "extra paycheck" twice a year, tax refund every year. Those aren't used in our monthly budget, and those are how we got 30 days ahead in our expenses. Now, they go toward savings/emergency funds/sinking funds. It takes time, but finding those little ways to add to it, like with a spending freeze or shave and save, really help as well!
They keep talking about EF and TE as though they are the same thing. TE are things you know will happen, but you are unsure of the amount you need or when you might need it. EF is for emergencies. A job loss, a tree falls on the house. Ben even said "moments where something you can't see coming or times when your TE cat gets overwhelmed". I think an EF is a necessity and something you should keep off budget so you don't touch the $$$.
One month ahead works as a temporary emergency fund for us (better than the $1000 option for us). Once debt is retired (soon!), we'll start building up to being 3 months on mandatory expenses.
The way I see it true expenses are expenses that are irregular but foreseeable. The emergency fund then is for expenses that are unforeseeable. I like the phrase "genuine emergency." If I could have predicted this expense, I have to pull from the other categories first before I can touch the emergency fund. The goal for the category for now is 3 months expenses.
I like to call it my "Peace of Mind Fund." I've come to strongly dislike the term "Emergency Fund" because it has a negative connotation. I currently have about 7 months of expenses and am slowly starting to strategize other savings buckets that complement it.
One category I don't dare to add in YNAB is "Funeral expenses" for loved ones! That is why I keep a category called "Emergency fund" instead of breaking it down to "Job loss" and "Funeral". I don't want to see the F word "Funeral" every time I look to YNAB! Too dark!
So would you budget more than a month ahead (seems like it would get confusing) or have a fund called "An extra month ahead"? I can't get my head around budgeting several months ahead.
If you reframe the question is it really about what point you stop putting money into east to grab cash and start parking it into basically untouchable investment for use 10 years down the line. After this year that idea really scares me!
I had a down payment fund for a new house; decided to use it for GME stocks atm and use my tax return and stimulus to crush my smaller debts (credit card and loan) so i can use those funds to work on my down payment more rigidly while also focusing on paying more on my car loan. Because that debt is just terrible
You should keep your EF readily available in a money Markey or HYS. If you dropped it in the SM there is the potential for it to take a dive which could hurt you. It also takes time for funds to clear and you would not be able to access your money quick enough.
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I have an emergency fund and a few sinking funds. It works well for us. The flexibility that YNAB gives you is awesome.
I love how using YNAB regularly changes your mind set, making a peace come into your life. I was taught if having an emergency fund will create emergencies in your like. I named mine, “Rainy Day Fund’ .
I have a few true expense categories for smaller ‘emergencies’ like one for unexpected medical costs or for broken appliances, and one big emergency fund called Zombie Apocalypse for the big stuff (like job loss or a house fire). The name reminds me not to take anything out unless there’s an actual Disaster going on.
Well, how convenient will it be if an actual zombie apocalypse occurs. You'll be one of the few that's been budgeting for it. World: 0. Marleen: 1.
-Hannah 🌻
I'm renaming my emergency fund Zombie Apocalypse now. With that and cardio cardio cardio, I'll be set.
My main "emergency fund" is still building to 6 months of expenses, but that will soley be for job loss. The "true expense" funds are earmarked for those smaller emergencies like car repairs, home repairs, medical bills, etc. I like keeping it separate like that so I know I'm covered no matter what.
Honestly though, the important part in all this is to not go into debt. So just make sure to have enough liquid funds to cover what may come up and it doesn't matter how it's split out.
Started an emergency fund in 2019. Before that I was just counting my "savings fund" as something I could dip into for emergency purposes, but I prefer the separate fund. Figured out the amount I need each month to cover only the bare essentials, and am now at a 4-month emergency fund. Aiming for a full year :)
Emergency fund is "built in" to YNAB. Simply budget money to each bill category (or any category) months into the future. You just have to spend less than you make (which you should be doing anyway). It feels good to see that you have your auto insurance, gas bill, phone bill, internet bill, home mortgage taken care of for the next 3 months.
If your expenses are $2000/mo and you are fully budgeted/funded 3 months into the future, you have an "emergency fund" of $6000.
Borrow from future categories to pay for your emergency and then build up your budget categories into the future again.
Though it probably is a good idea to have a separate emergency fund in the beginning for new users to get that sense of security.
I really like this idea! It‘s so great to see that the most important bills are already covered months ahead.
What perfect timing. I just today passed the thousand dollar mark in our emergency fund. Felt so good to see that since that was a goal of mine. I agree, I have a ton of other true expenses that are mapped/planned out and those are the ones that always put me in the worst position financially. I like the idea that Jesse had in a recent podcast where he said to not spend the money in the emergency fund but to move it to which ever category you need it for so you can always reference back as to what happened.
I have repair funds so my emergency fund is more about job loss than anything. I don't do the budgeting months ahead, it's too complicated, I like my life simple. Budget then have a pile in savings.
I like to keep both an emergency fund category containing 3 months of expenses + am a month ahead. I like to keep them separate simply because in the event that something that I haven’t budgeted for suddenly happens, I’m not having to scrounge through my categories to cover the cost. I can simply pull from my emergency funds category, then replenish this over time while also building out a new category to cover when/if that sudden cost happens again.
This ^^ 🙌 I feel like this isn’t really brought up much. I’m budgeted of a full month ahead and I have an emergency fund with 3-4 months of expenses in it. In the event that something happens, I don’t want to have to pull money from future categories.
Plus, I like the idea of having a category that tells me my net positive/negative for the month. So if I need to replenish my emergency fund, it’s easy for me to know exactly by how much. Cheers!
I started taking control of my finances this January, so my first focus was to build a small emergency fund, now I’m paying off debt while slowly funding my true expenses categories and then I’ll keep adding to my emergency fund. I feel better having both areas covered.
I have an emergency fund of 3 months worth of expenses, following the general advice of having 3-6 months. Definitely changing the name to “prudent reserve” after watching this video though lol.
I personally think having an e-fund is essential. The reality is, you can embrace your true expenses, but there will always be truly unexpected events that will happen to you (i.e. job loss due to COVID), so you must be prepared for those events.
3 minutes in and I’m realizing I need a new category that specifically has all my various true expense sub categories. 🙌🏽
Here is one another reason to have an emergency fund (warning - it can hurt feelings): If/ when your love one dies, her/his bank account gets frozen, same if the bank account is a joint one. It could take a while before you can touch the money at a moment where you are overwhelmed, specially when the event was not expected.... So in our couple, each of us has an emergency fund to help get through this terrible event.
Oh how I would love to listen to this in the car. Please put this into podcast form!
I use an aux cord and play it thru my car speakers
Podcast form audio only would be a great addition for times when listening is better than watching. Would prefer to not stream video in the car, helpful for those without unlimited data plans.
I love these videos. New to YNAB. I will definitely be calling my EF “prudent reserve”! Love it!
Thanks to YNAB, I do have multiple sinking funds accruing funds for “emergencies”. But I do also have the $1k fund for peace of mind. Nice buffer to have. After getting rid of debt I can build it up to 3-6 months of expenses...or age my money quite a bit - get 1-2 months ahead on expenses.
This is exactly what I'm doing right now. It's just nice to have that fund there "just in case."
I have an emergency fund with 3 months of income (after taxes). I don’t feel like I need more than that due to true expenses and my circumstances (steady job, etc.) but it’s definitely different for everyone.
I am building an emergency fund because I'm also still building my true expenses. Once I've built those up I'll change it to an income replacement fund and work on increasing it.
This has me thinking if I should just change the name of my emergency fund to savings. I have a category called budget cushion which is only to be used if I am over in a category. I have a category for medical, home repair, vet bills and car repair which I think are the major emergencies that can come up so may just re-name it to savings. I love the freedom we have to name and rename categories. Thanks guy.
I've been diligently saving 400 dollars a month in my emergency fund, but I realized that what I am actually trying to do is save up enough money to replace my septic system in the house in case it fails. So just gonna calculate it as a true expense, that way I dont raid it (plus the lock emoji- cant touch it!)
I'm definitely in the EF camp. A blown transmission and a tax bill from Uncle Sam in the same year reminds you of how you can never plan for all the headaches that will bust the best budget.
I'm uber risk-averse, so I have 8 months living expenses in an emergency fund, then another 3 months worth in my car replacement and home maintenance funds. Unless I lose my job *and* accidentally fly my car into the windows of my high-rise condo unit in the same 3 month period, I'll be ok! I'll just stay far, far away from Mr. Weasley and his Muggle contraptions 😆.
Automatic paycheck deductions are another great way to build an emergency fund. I set mine to go into an account that's not connected to YNAB, and usually forgot about it. When I took money from it, I considered it a loan and always paid it back asap.
I just moved across the country, so lately I've dipped in pretty heavily to create a Launchpad Fund (first rent, utility fees, unexpected moving costs) and House Upgrades (mostly furniture). I still keep about $3K in my Emergency Fund in case the sky falls, but the rest of my spare cash is focused on setting up my new house. I also have a Rainy Day HYSA that I never touch, also funded through automatic deductions. That's earmarked for a down payment someday, but if I had to I could move it to cover a crisis. I usually forget it's there. For me, long-term savings is all about automation.
I have a few emergency funds:
-Emergency medical
-Ermegency vet bill
-Emergency car repair
-Job Loss
-Future baby fund
Ours are exactly this too!
I have an emergency fund for a full months expenses etc because my husband has had 2 spontaneous lung collapses in the past 4 months and when it happened it was unexpected time off work etc and having that money there just makes us feel less stressed. We’ve now also been sure to fund the next month (so close to being fully funded) but before we were so focused on debt that we didn’t have money set aside and it really hurt us.
I had an emergency fund when I started YNAB, but I've made some adjustments to it. The bulk of it is my Income Replacement (for three months expenses should I lose my job), and then I shifted some to my sinking funds where I felt it would be more useful. But I also have a lot of "buffer funds" built into my budget, and I use some goals to save up a little extra in spots. I have been just on the verge of being a full budgeted month ahead and I should finally accomplish it next month with my third paycheck, at which point my goal is to get up to six months expenses saved JUST IN CASE.
I use the term 'Contingency Fund' which I got from Mary Hunt's book 'Debt-Proof Living'.
I really enjoy these videos. Thank you!
I am using an HSA as an emergency fund. I didn't like the HSA that my job opened for me because of the fees and limits in investing, but I found out I can open my own as long as I'm enrolled in a qualified "high-deductible health plan." So I opened an HSA with Fidelity, rolled over the money from my other plan, and started paying out-of-pocket for my health expenses. Anything I take out of the HSA is tax-free and has no penalty as long as its a qualified medical expense. Of course there are some emergencies that are not health-related. The way around that is that there is no deadline for reimbursing yourself from the HSA, so I just save my receipts. So the money in my HSA grows as I put more in and the investment grows (an index fund), and the money available to me to take out grows as I pay more out of pocket for health care and my "shoebox" of receipts gets larger. If I can cover any "emergency" through my true expenses, I will do that, because of the tax benefits and compound interest of the HSA. I'd love to save that until retirement. As far as YNAB goes, the HSA is a tracking account, so I don't have a category for it, except for when I contribute to it.
Thank you, guys!! This was super helpful for me to finally cement the choice and stop vacillating. Also, "Prudent Reserve," YES! I love it!
I have sinking funds for specific goals, but an emergency fund for my bare bones expenses (rent, internet, and phone for 3-6 months).
Even though I have true expense funds and I’m working on next months expenses, having a chunk of money for the unexpected feels right. Especially now!
I keep our emergency fund as 3 months worth of living expenses. I don’t use it for unexpected bills, we like to have in case of job loss, serious illness etc. Anything where we could lose our income.
Two days ago my heat pump was speared by tree limb. We called the HVAC guy, he came out and gave a price to fix it. I had half in my home maintenance category and took the other half from my emergency fund. The lack of drama and anxiety was... Unprecedented. Truly, this was a complete non-event. As my daughter would say... I was shook.😂😂😂😂
Windfalls: "extra paycheck" twice a year, tax refund every year. Those aren't used in our monthly budget, and those are how we got 30 days ahead in our expenses. Now, they go toward savings/emergency funds/sinking funds. It takes time, but finding those little ways to add to it, like with a spending freeze or shave and save, really help as well!
They keep talking about EF and TE as though they are the same thing. TE are things you know will happen, but you are unsure of the amount you need or when you might need it. EF is for emergencies. A job loss, a tree falls on the house. Ben even said "moments where something you can't see coming or times when your TE cat gets overwhelmed". I think an EF is a necessity and something you should keep off budget so you don't touch the $$$.
One month ahead works as a temporary emergency fund for us (better than the $1000 option for us). Once debt is retired (soon!), we'll start building up to being 3 months on mandatory expenses.
The way I see it true expenses are expenses that are irregular but foreseeable. The emergency fund then is for expenses that are unforeseeable. I like the phrase "genuine emergency." If I could have predicted this expense, I have to pull from the other categories first before I can touch the emergency fund. The goal for the category for now is 3 months expenses.
I like how they take turns talking and not just one who talks too much. Drives me crazy when someone does that!
I like to call it my "Peace of Mind Fund." I've come to strongly dislike the term "Emergency Fund" because it has a negative connotation. I currently have about 7 months of expenses and am slowly starting to strategize other savings buckets that complement it.
In my budget I have emergency fund checking buffer and true expenses am I over doing it
One category I don't dare to add in YNAB is "Funeral expenses" for loved ones! That is why I keep a category called "Emergency fund" instead of breaking it down to "Job loss" and "Funeral". I don't want to see the F word "Funeral" every time I look to YNAB! Too dark!
So would you budget more than a month ahead (seems like it would get confusing) or have a fund called "An extra month ahead"? I can't get my head around budgeting several months ahead.
What if you lose your job?
If you reframe the question is it really about what point you stop putting money into east to grab cash and start parking it into basically untouchable investment for use 10 years down the line. After this year that idea really scares me!
I wonder this too. Sometimes it seems you can never have enough money stocked up.
I call my emergency fund, "my peace of mind fund". I know...so creative.
My sinking funds are my main emergency fund. I have a generic emergency fund that I throw small balances in but it's only about $500.
I am *****this***** close to hitting my initial £3k goal for my Emergency Fund! After that I'm going to work on getting a month ahead
I call mine WAM. It’s really only for expenses my true expense categories can’t cover.
Once you retire, your IRA/ROTH/Brokerage all turn into your emergency fund. You can pull $$ out of any of these pretty quick. Am I missing something?
If one is able to retire, yes.
You need to have quick access to EF dollars. Something like a HYS or money market. When you retire your IRA/401k turns into your paycheck.
So, we have a fund solely for a job loss. So income can be consistent in that situation. Everything else goes into its respective category.
Need $5,000 to keep from being homeless
if i weren't in debt, I would yeet my emergency fund into the stock market.
I had a down payment fund for a new house; decided to use it for GME stocks atm and use my tax return and stimulus to crush my smaller debts (credit card and loan) so i can use those funds to work on my down payment more rigidly while also focusing on paying more on my car loan. Because that debt is just terrible
You should keep your EF readily available in a money Markey or HYS. If you dropped it in the SM there is the potential for it to take a dive which could hurt you. It also takes time for funds to clear and you would not be able to access your money quick enough.