The trick for me for building a sizable emergency fund was to treat a certain amount as the new zero. So basically when I first started out when I was 18, I would treat $500 as the zero. In my 20’s I would treat the $1k as the new zero and would be so disciplined to not go below that $1k mark. Before I knew it I was applying the same principle to $10k. Then in my 30’s I was treating the $50k as the benchmark zero. Now, in my forties, I generally float around $60k as an emergency fund that sits in a HYSA. I only keep about $10k in standard checking for day to day purchases and paying bills. The beautiful thing about this was during that time, I also began investing and have grown my brokerage accounts to just over $250k. Paired with my 401k and other tangible assets I have I’m in a spot now where if I wanted to try something new like starting a business or changing jobs.. I could afford to do it comfortably. Having the emergency fund and being financially literate does lend to a different type of freedom.
I use a 6 month emergency fund, took me 3 years to build it up. I also have sinking funds for Home Expense, Property Tax, Holiday, Auto Repair, Health Deductible, and Vacation which I'm still building up to a goal of $2.5k each. I should have the sinking funds up their goals in 2025 then I'll keep adding to keep up with inflation or cost of living. I also have a separate paycheck ahead account to help prevent overdrafts in a given pay period. I stay one paycheck ahead and that prevents a lot of potential stress. I still use debt for big purchases but pay them off quickly using low interest loans and credit cards if needed, but those occasions are rare.
Yesss! My money life completely changed when I actually started planning for those other expenses like home expenses and deductibles. Not only keeps the fund up to date, but gives you great peace of mind. Keep up the great work!
The trick for me for building a sizable emergency fund was to treat a certain amount as the new zero. So basically when I first started out when I was 18, I would treat $500 as the zero. In my 20’s I would treat the $1k as the new zero and would be so disciplined to not go below that $1k mark. Before I knew it I was applying the same principle to $10k. Then in my 30’s I was treating the $50k as the benchmark zero. Now, in my forties, I generally float around $60k as an emergency fund that sits in a HYSA. I only keep about $10k in standard checking for day to day purchases and paying bills. The beautiful thing about this was during that time, I also began investing and have grown my brokerage accounts to just over $250k. Paired with my 401k and other tangible assets I have I’m in a spot now where if I wanted to try something new like starting a business or changing jobs.. I could afford to do it comfortably. Having the emergency fund and being financially literate does lend to a different type of freedom.
Actually really love this idea! Building that automatic minimum limit; good stuff. Thanks for sharing!
I use a 6 month emergency fund, took me 3 years to build it up. I also have sinking funds for Home Expense, Property Tax, Holiday, Auto Repair, Health Deductible, and Vacation which I'm still building up to a goal of $2.5k each. I should have the sinking funds up their goals in 2025 then I'll keep adding to keep up with inflation or cost of living. I also have a separate paycheck ahead account to help prevent overdrafts in a given pay period. I stay one paycheck ahead and that prevents a lot of potential stress. I still use debt for big purchases but pay them off quickly using low interest loans and credit cards if needed, but those occasions are rare.
Yesss! My money life completely changed when I actually started planning for those other expenses like home expenses and deductibles. Not only keeps the fund up to date, but gives you great peace of mind. Keep up the great work!