When and How to Use Your Emergency Fund
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- Опубликовано: 15 сен 2024
- When it comes to personal finances and saving money, some people forget the importance of having a rainy day fund. Not only is it important to set aside money in case of the unexpected, it's equally important to know when and how to use your emergency fund.
In this video, we tell you how much money you should set aside for the unexpected, what constitutes an emergency, and where to put your emergency stash. We give you examples from our own lives and tell you when and why we chose to dip into savings.
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I do have an emergency fund & having sinking funds has been a game changer for me. My water heater went out about 2 years ago. It may seem strange but I chosen not to replace it yet. I shower at my gym (free membership because I teach there) & heat water to wash dishes. Going on a mission trip to Africa REALLY helped me see what is need or want!
We've never been overseas, but our friends who have definitely agree with you and say that it helped change their idea of what was actually a need. Thanks for sharing.
Our water heater gave up two weeks ago. We had to pay $1600. I finally realized it was an old heater. If I had a home repair fund I wouldn't have needed my emergency fund. My husband and I got smart. We now keep track of when things like a new roof or new tires etc.are expected. We don't expect to use our emergency fund as much in the future.
Very wise!
I'm a great believer in making do until I have to buy. For instance, when my fridge died, I used my chest freezer to make ice and used a camp cooler as a fridge for the ten months that it took me to save up for the fridge and find a good one on sale. (I had recently paid off all debts, didn't yet have savings and refused to go back into debt.) When my lawnmower started acting up, I used the weedeater to "mow" the lawn until I could figure out how to repair the lawnmower (thanks youtube university). My hot water heater died over a year ago, but with "the virus that shall remain nameless," I didn't want anyone to come to my house to replace it (plus the cost of everything was skyrocketing because of shortages). I just boil the water that I need for washing dishes and myself. Clothes have been fine in cold water. In fact, I've saved about $450 in gas bills - which will go toward the new water heater, once prices come down. In this hot weather now, I even prefer a cold shower! Okay, maybe that's a bit extreme for some, but....it's fine for me. I feel much better having a very healthy emergency fund.
You have no idea how impressed I am with your "can do" attitude. You've mentioned fixing some other appliances yourself before. And didn't you build your own back deck, or something? I can't remember now. But, we think you are so awesome to take on your own building and repair projects.
C Gt I haven't used a hot water heater for over 5 years. I calculated it cost $60/month to keep water hot. I heat water on an as needed basis. Old coffee makers are great for this. Being disabled I can't get into the bathtub or shower. House is handicapped equipped. When my fridge bit the dust I looked at work on our bulletin board and used one for $50. They delivered it and 7 years later going strong! There are ways to save and not everything has to be perfect all the time. I grew up "making do" and will continue that mindset.
@@vixxcottage Wow! You got an excellent deal on the fridge! I totally agree with your mindset. I continually remind myself about how people live in other places. We are so spoiled in the Western society that we forget: it is a luxury to have clean running water. We are blessed to have clean clothes, food every day and a roof over our heads. I think most North Americans forget how fortunate we are.
When our furnace went out in the middle of January, if we hadn't had a wood burning stove, I would have used the emergency fund, but since we did have one, we waited and saved up to take care of it.
Wow. Good for you. That takes a lot of discipline to wait - especially in the middle of winter.
I spent the $600.00 stimulas on a new washer & fridge, clearenced at Lowes. I still have the $1,400.00 & waiting for a new water heater, the old one is from 1998. Gonna save gas going to the laundrymat.
We’re still using the same water heater from when we bought our new home in 1972.
@@LaCatLady I think two gay guys were the first owners in mid 80's, that makes us the the second owners. I just got a letter yesterday saying mortgage is paid in full. My question, will someone be contacting me about taxes & insurance or do I contact them, does anyone know? I wish I knew where those guys were, to tell them. I worked so hard to finish what mom started, She could not even move in for a month, she was battling late stage ovarian cancer, survived 22 years.
@@victorwadsworth821 No one’s going to contact you regarding when taxes/insurance is due…you’re going to have to find out about that yourself. If you’re 65 (in our state), you can go to the Tax Assessor’s office and “freeze” your taxes so they won’t go up every time property is reassessed. That only applies to taxes in effect now not any additional taxes voters approve later. You’ll figure it out. Congratulations on paying off your home.👍🏻😺
@@LaCatLady Disabled, 65 in April
If the mortgage is through a bank and they were paying them they would know if not you will have to phone the tax dept and get insurance on your house yourself
We used our emergency fund to replace our roof due to a serious hail storm. We had home owner's insurance which paid us back but cash was needed to pay the contractors up front because one of the agents had a major computer crash with the needed information on it. It was a relief that we had the money at that point. You know some things never go smoothly even with insurance. Luckily, the weather cooperated and we stayed dry.
I’ve had a real run on unexpected expenses lately. The bathroom floor rotted due to a leaky toilet. That meant that both the floor and thirty year old toilet needed replacing. I had a tooth ache that resulted in removal of the tooth. I had my propane tanks replaced and the propane company found that my stove was leaking gas and needed replacement. Also, the propane to fill the tanks has hit my fuel budget because I now have two tanks. Even with the credit for the fuel in the tanks jeverything converged at once.
I do have emergency funds. I paid off the floor and toilet for about $2200. Not a bad deal. The dentist wanted $4000 for the bridge I will need. I budget for the dentist and had almost $3000 in that line item. After dental insurance the tooth will cost $1450. I have that ready to go.
If the propane fill costs more than I am comfortable with out of my heating budget I can hit up my emergency fund and replenish that. I keep a $20000 general emergency fund.
The stove does not as suggested need to be replaced. I called the stove company and they are sending me the part. It was $63. I have a friend who will put it in and I will have the propane company come out and check afterwards.
I have $10000 saved for my next car and save $250 a month for the next one. I also have a auto repair fund with a little over a thousand dollars in it. I expect the car to last 4 to5 years. I will have enough for a newer car.
I budget for gifts and Christmas and birthdays. I have about $4000 saved for a vacation. After tithes I live on about $32000 a year. My house is paid for and I pay my credit cards off each month. So even a lower income senior can budget and plan for emergencies. I have cataract surgery next month and I have enough for new glasses after the surgery in my medical Fund budget. It normally pays for prescriptions, but will handle glasses.
I live on about $32000 and budgeting has keep me debt free. You guys are the best.
Linda, you have, indeed, had a run of bad luck. Nothing is worse than a toothache! Good thing you had an emergency fund in place and all your other budgeted categories fully funded. Well done! We trust that your fortunes will take a turn for the better now and the worst is over. By the way, smart move checking on a replacement part rather than a costly repair. Super good tip!
Good tips! As an older, single person- I've worked so very hard for so long to get out of debt and build a fully funded Emergency fund- it will make me cry to have to use it! Yes, I plan for car repairs, taxes and car/homeowners insurance, and will begin saving for new appliances next. My emergency fund is currently a solid 6 months.
I'm really still stuck at square one and don't have an emergency fund built up yet, but this video motivates/terrifies me into building one. It's so vulnerable to be without one.
Emma, thanks for your comment. We hope you'll start saving soon and we will be your cheerleaders.
Emma I was where you are 1 year ago. No emergency fund and living on a fraction of my previous income. I sat down and looked at everything. I paid off 2 debts with everything I had. Meal planning became a priority going to local grocery outlet cost is less than half. All utilities cut to the bone. I have not had cable or TV for 25 years so no cost there. Look at everything. Phone is another money pit. I buy Android $100 at Walmart and can get monthly cost of $35. I use mine for everything I don't have a computer. There are many ways to save but must get creative. Good Luck!
Thank you so much for the replies and support.
I need a washer but my emergency fund will not be used. I don't have 3-6 months saved yet but will by next year. I have really improved my finances from watching channels such as yours and writing down goals. Seeing goals often makes a difference. Last year my teacup poodle had multiple problems to the tune of $5000 and she survived but it was so extremely hard. People ask me what did you do with your stimulus money and I point to the dog. I don't ever want to go through that again. Even though I am on a limited income I have learned to make sacrifices to save every month.
We understand. Our dog, Shelby, had some health problems at times, too and you do what you can for them. Pets become members of the family.
I learn so much from every video! So grateful to have found you guy's! 💙 Working on paying of some debt and getting a emergency fund and setting up my sinking funds I wish I'd been educated earlier, but better late than never right🤷🏽♀️
It's never too late. We are so happy to have you with us, Krystal.
In my view, an emergency is not a true emergency without these 2 qualities - 1) the problem MUST be addressed immediately and 2) the problem is entirely unforeseen. For instance, several years ago a car accident occurred at the street corner next to our home, and one of the cars involved crashed into the corner of our garage. This event defined a true emergency because we could not foresee such an event happening, and because our own two cars were trapped in our garage, and we didn't know if the garage was stable, we absolutely needed to have the problem fixed. Fortunately, our cars were not damaged and in spite of the fact that the car crashed into the corner of the garage, it did not collapse. Also, we had homeowners insurance, and the cars involved were also insured, but we still had to come up immediately with a deductible to the tune of (pause for Dave Ramsey to chime in) $1000. The deductible was later reimbursed to us, but we still had to have that amount up front. I keep a very generous combination emergency / general sinking fund in the bank to cover all major purchases I know I will eventually need to make from a roof to a car to a water heater, etc. and I intend on keeping it fully funded if used.
Excellent example, Nancy. Good planning on your part!
I really appreciate your videos! I did not actually know the difference between a sinking fund and regular savings. I have said that we need $1000 per person; for my family that means $4000! We are just to this point where we are able to do this. My husband and I just paid off I don’t even know how much debt! I really struggle with not taking money out or not rebuilding after an emergency; usually car problems. My dad worked at OSF as a medical physicist. My family would go to Peoria on the weekends and go to the Christian book store or to prairie life park. We went there a lot because it was actually pretty cheap for my family to do. I have eight siblings and that family pass served us well.
Hey, nice to hear from someone who has been to our neck of the woods a lot. I've never heard the emergency fund formula of $1000 per person. That's actually a really interesting way to look at it.
I have a dryer but use my clothesline most times so I would use an emergency funds for a new washer due to failure as that is an emergency but I could live without a dryer so I wouldn’t use the EF for a dryer. Yes, I agree NO cold showers for me or hubby…replace the failed hot water heater!
Dave Ramsey says to get it to that $1000 amount to start, but the 3 to 6 months of monthly living expenses or up to a year.
I would also recommend having a little cash put back somewhere safe at home Incase something happens with the bank like a power outage or some failure like that just to have a backup if things go wrong 🙂
Or if the banks deside to close their doors
I do that too.
at a minimum, we keep the amount of all our insurance deductibles (home, auto, health) in a liquid account--$5500. We are retired, so our living expenses are always covered.
Excellent!
Loni that is a great idea! I will look at that thanks for the idea!
I had to use money in my emergency fund recently as my laptop stopped working completely (it was over 8 years old and they are not making them to last now) and could not be saved. I had to buy a new one as I am going to school part-time online so needed one ASAP, I was thankful to have money in my emergency fund. PS. The top and necklace combo looks fabulous on you Hope. 💖 from Canada.
If that is your last resort that is a practical need however because the cost of a laptop is actually an investment and can easily be returned back.
Hi Larry & Hope, loved this video and this hit very close to home for me. 2 weeks ago I had 2 emergency room visits & 1 hospitalization (I’m ok now). The medical bills are starting to come in 😩. I do have a medical sinking fund, but there’s not enough $$ to completely cover the medical bills. I could use the emergency fund to cover the balance but I refuse to dip into my emergency fund, so I’ll be asking to be put on a monthly payment plan to finish paying off the medical bills. I just want to leave my emergency fund alone and just use it as a last resort. Thank you for this video.
So sorry to hear you had some medical issues, Judith. You are smart in saving back the EF as long as you can.
I’m so glad you are ok now! Just a thought…have you tried calling and asking if they will take less for a cash payment? I know a lot of medical facilities will adjust bills down if they know the person is paying out of pocket. You may have already done this, but I just thought I would mention it just in case. 😊 Payment plan would be a great option though. Glad you are out of the hospital and feeling better!
I'm a fan of Dave Ramsey, but I agree with you about a 2K emergency fund. So many emergencies cost me more than one thousand. By the way, we now have an emergency fund that will cover 6 months of our monthly take home pay. Thrift works!
Such good advice thanks...and i like that you keep it lighthearted even though money talks can be a heavy subject ✅🥰🌻
Yesterday, I got a notice my mortgage is paid in full, wasn't expecting it until my birthday in April. Need to look hard at repairs. Water heater, brick on front house, vent house in roof, air conditioner & a new for me car, I have no vehicle at the moment. I want a small pickup.
Victor, yay! We are excited for you.
Having an Emergency Fund is VERY IMPORTANT! I recently broke my ankle in 3 places and required surgery. Being fairly healthy I haven't really used my Employer Health Benefits so I had a $1,000 DEDUCTIBLE that had to be paid before the surgery. Also, even though my Employer pays Short Term Disability AND I also have a Short Term Disability from AFLAC I took over a MONTH before I had ANY $$$ coming in! Meanwhile the BILLS were still coming in and wanting to be paid! Thankfully I HAD that Emergency Fund! So VERY Important to have for UNEXPECTED EMERGENCIES!
Oh, my, Tess. We hope your ankle is all mended now. What a scary thing to go through.
@@UndertheMedian Thank you for the concern, but unfortunately I'm not back in the swing of things quite yet. The incisions where they sewed me up have gotten infected so that has put me back a couple of weeks. I have another appointment next week to see surgeon for recheck on the infection and if all goes well i'll be off to PT for 8 weeks probably starting after Christmas.
@@tessoconnell2064 , oh, goodness. We will pray for no more complications.
@@UndertheMedian Thank you. Since it's my right ankle and I drive a Mass Transit Bus it is very important that i have no more complications.....
Hope, you've found the exact best color to wear...especially the shade of blue on you scarf...! You just look SO, SO good in those colors! And then, to coordinate the duck with blue feet and bill on the shelf behind you....wow, wow, wow!!!
What's buying on margin?
I've used emergency funds to live on during a 2.5 year period of waiting for disability income. Fortunately, I never thought 6 months of living expenses for an emergency fund was enough. I always aimed for 3.5 years! I never got there, but I got pretty close! I've also used emergency funds for larger than normal car repair expenses and major, unexpected medical expenses. I also used some of it when I had to pay for my brother's unexpected funeral. I paid a part, but it was a large expense unplanned for. I also like plan B's, C's, and D's, etc.
Thanks, Jonna. That stuffed animal is Larry's. The boys got it for him years ago as a Christmas gifts. It's his favorite bird. He keeps it on a shelf in his office.
Had to stop and say, blue looks gorgeous on you!
Oh, thank you, Val. That is very kind of you.
true
We use the emergency fund if we don't have alternatives. So when our washer died last year, we knew we could go to a laundromat cheaply and save what was lacking in our "furniture" fund in fairly short order. Then buy the washer. When money was very tight and we had medical emergencies (two emergency c section premies, one needing eye surgery not covered by insurance), we spread repayments out over time or took the money from other saving categories in the budget.
Major appliances for our house that stop working to replace. Vehicles that "need" a big repair. Out of town Family Emergency.
Love your channel
I agree that $2,000 is the minimum for an emergency fund. I think $3,000 is even better considering that costs are going up and more then one emergency come up in a short time. We put extra bonuses or profit sharing into our emergency fund because it’s money we didn’t expect to pay for emergencies we didn’t expect.I do disagree that vacation plans shouldn’t be abandoned if at all possible. I’ve seen some families lose family members and not having that time together and that doesn’t always have a price. Life is precious. I’m not saying to go in debt or be unreasonable about it but don’t always put that on the back burner.
Noreen it depends on your mindset. If your family took regular vacations growing up that is a normal thing for you. I have a friend that takes 4-6 vacations per year and uses credit and pays it off all year. To her that is important. My mindset is different. Grew up in extreme poverty and survival was what we concentrated on . Vacations were not in the budget. We did go with friends with tent couple times. Now I am not able to go on vacations but I don't feel deprived. It is a debate of wants versus needs for many of us.
In my opinion, emergency fund shd be used only for purely survival like medical emergency or may be to keep a roof on.
Deepa, great reminder. There are a good many things that we can really wait on until we have the money in hand. Thanks for your comment.
Exactly,or unexpected expense,like hvac totally went out,cannot be fixed any more.
We have a 6 month emergency fund for job loss/ medical emergency. Our home emergency fund has about $4,000 right now and have sinking funds for medical, car, etc. We only add $25 to each emergency fund now that they are fully funded. If we buy something (i.e. patio fix, broken appliance) we will bulk up our monthly contribution. I like knowing our true emergency fund will hopefully never be used!
You have a wise plan of action. We love being prepared for the unexpected.
Dear Larry and Hope, as I was watching and enjoying your video I realised how much I have learned from you and implemented so many of your wise suggestions. Thank you so much so both of you and best wishes and love from Sydney, Australia. P S Can Larry have a puppy please?
Merylee, we're so happy to have you with us. Larry's puppy is put on hold for now. We're going to get him retired and settle into that first. But, he keeps showing me photos of dogs. LOL!
I had 50,000 in emergency fund and disaster hit. I had foundation problems transmission went out of my car had to get new roof and new water heater. Just now getting back on track with baby step 1. Had enough money to purchase a good used car but had all the expenses at once
For emergency appliance replacement 1 year same as cash. I divide my total cost by 10 and pay that every month. I would only use emergency fund if I could not get it paid off by the 11th month. I have never had to do it.
I love your channel! Always priceless tips and words of wisdom!!! You are a beautiful couple, and have such a lovely family!! You are really an inspiration!! Please keep it coming!! I look forward to your next video, and I always discuss what you said with my family! I hope you know that you are appreciated!!! God bless you.
Thank you, Chug. Appreciate your comment.
@@larryware1 Well thank you, Hope and Larry!
We just lost our silver maple tree. Haven't had the stump removed yet, but soon. Emergency fund to the rescue! I have also face planted on my icy driveway after taking the garbage can to the curb. Shared experiences! Enjoy and learn from your channel!
Sorry about your tree - and your fall - but, you're right shared experiences.
Love the title OPM. Makes so much sense, not to use other people's money, for an emergency.
Thanks, Janet. We find it's been super helpful to remind ourselves not to use OPM.
We just had to use some of our emergency fund for the first time that I can remember. We had a water leak in the wall, and initially thought it was the hot water heater, so we replaced that (including bringing that up to code with an expansion tank), only to find that the leak was in the line for a spigot in the wall right next to it. We did end up with an insurance claim, but replacement value unfortunately does not really pay what things cost in the current very hot construction market. We had to replace drywall, carpet and wood flooring. We had planned to replace the wood floor in about 4 years, but didn't have a sinking fund set up for it yet. We bought this house 3 years ago and have been making upgrades with cash, and had a fairly long, expensive list to accomplish. In addition, we had planned to extend the wood into the kitchen, which was a tiled area in the middle of the wood that just looked odd. We ended up paying the extra 3k to do what we planned to do in 4 years, using emergency funds to do it. However, we are debt free other than our mortgage, and did not come near depleting our emergency fund. We also have sinking funds for many other things (including large medical savings, property taxes, Christmas, car service, etc.), and a pretty large car replacement fund (almost as much as our entire emergency fund), so I guess I could have accounted for it as coming from the car replacement fund - the money is in the same money market account. All this very long rambling comment with justifications means is that I still agonize over taking the extra 3k out. :) I think that's the reason I accounted for it that way, because the pain of seeing that smaller balance will motivate me to get it replenished as soon as possible! July is a 3 paycheck month, and the 3rd paychecks are 'extra' for us because I budget using only 2 paychecks a month, I should be able to recoup most of it in July. We definitely will not use the car replacement money until the emergency fund is completely topped off again. But oh, the pain of how quickly that money that was so hard to save can be spent!
How awful. Yes. You needed to use it in that case.
My Uncle Jimmy said, "I don't like 3 places. Hospital, Funeral home, Jail." So my emergency fund is only for anything to do with those 3 places.
LOL! You gave me my chuckle of the day. Your uncle gave you sound advice.
Wow! I didn't know freon wasn't available anymore!
I had Dave's recommendation of $1000 for an emergency fund, and last month we experienced an emergency surgery and car accident- not related. I was off work for 3 weeks unpaid and had to use the emergency fund to pay a couple bills, get groceries and other household items that we absolutely needed. Not to mention replacing our lost vehicle (which we need to save for) and medical bills insurance didn't cover (which I have adjusted our monthly budget for). The emergency fund is just about gone, so I agree with your 2k suggestion and will replenish the fund to that amount.
We are grateful that it sounds like everyone came out of the accident okay and that you were able to use your emergency fund to pay the bills. Hopefully, the worst is over for you now.
Oh yes, I'm certainly grateful that no one was injured and that we had the fund as a cushion! That's what it's there for!
What are your thoughts on a home warranty for your home. Usually about $400 to $500 per year? Covers all major components of the home and appliances. Pay a service call fee ($50-$75) and if item can’t be repaired, they will replace the item.
Ann, that's a great question. We've never had one and, to be honest, we never really looked into them. My first impressions from what you describe would be that It would seem to me that an emergency fund of 6 months would cover most items breaking. With the exception of your furnace or central air, most items will run you $1000-$2000.
Hi. Can you please do a video on how many sinking funds you have? Thank you. Your advice is sound.
Absolutely. Several people requested this topic. So, we are happy to share.
I know with hot water heaters, my dad and brother have had to drain some of the lime out of them.
Miss the chats been really busy but I'm binge watching you guys today to catch up LOL.
Awesome, Jen!
We love to hear that, Jen.
I perfectly see you two talking about this, in daytime TV shows ❤️
Thank you, Rafael.
Have to watch the pricing on things we need when trying to figure out if we can dip into the emergency fund. Last summer, someone I was helping out destroyed one of my 2 window units and stole my portable unit. With summer arriving, I've been trying to figure out the best way to deal with this need. A lot of ads for those little swamp coolers (aka "portable AC") have been popping up on my screen - for ~$89.00 after their 50% discount. Same units are on Amazon for $20.00 +/-.
Wow! You're right. Gotta know your prices before you buy. Excellent point.
Your videos are helpful for me
👍thanks
You are very welcome.
We used our EMF for our Hot Water Service it died this year, $1350 including the plumber to install it. It was the 3rd one since the 26 years we have owned our home. We will only use it for replacing major appliances - fingers crossed! Or unexpected 'big' bills. Our EMF is 6 months worth also.
Aren't hot water heaters frustrating? We'd replaced them three times, too. Once in the old home and twice here. Hopefully we're good for a while now.
How do you "Start" a sinking fund when you don't have the cash up front to put into the sinking fund? Do you cover that in your explanation of sinking funds? Thanks for your help.
For me, I simply look at how much I'm going to need to spend in total and divide that by the number of paychecks until I want to buy it. Then I know how much to put into the fund every paycheck.
Hope, that color is absolutely beautiful on you!!!
Thank you, Jackie.
Great video. Definitely great advice that everyone should use.
Thank you, Shellie.
My dishwasher !!!
It's on its way out... repair is not economically viable...so going to use it until it throws it's legs in the air and breathes it's last 👍
Good for you, Sue. We do the same.
We pray over appliances a lot these days. LOL!
Sue mine bit the dust about 10 years ago and to tell the truth I don't miss it. Due to heavy lime deposits here dishes never looked as good as when hand washed. You might be surprised 😮
Love your top, Hope. You look great in that color! Great episode on such an important subject. Thanks for all the good information. yes, I'd use my emergency fund to replace appliances or home equipment.
Thanks, Alice. We agree. For the longest time, we tried to set aside funds for aging appliances and then we finally decided that with a 6 month emergency fund in place, we'd just take it out of there if we need to.
I generally put alittle extra (on top of my regular amount) in my home maintenance sinking fund with the assumption that eventually down the road I would need to replace an appliance. I do the same for car. Put abit more than what I would expect to pay for regular maintenance and small repairs through the year. Not sure if that’s better or just take from emergency fund when needed then replace slowly back into fund. Always had in my head emergency fund would only be used for “apocalyptic” emergency like loss of job. Hmm..maybe I need to rethink my plan..?
I actually think your plan is a sound one. Putting home appliance repair and replacement under "home maintenance" under the umbrella of your home maintenance fund makes really good sense to us. We tell folks to do what works for them and it sounds like this plan is.
i ad 8000 emergency fund..i ad to make my fondation of my house imperméables..that cost 10 000! now back to save for my emergency fund..im at 3000..i have 2 rental proprieté..had to do it! to keep my house value. that was important..water can get nasty . i appreciated you chanel..you are common sense poeple!
Wow! We're glad you had that emergency fund in place when you needed it!
a lot of us don't have emergency funds to save I'm happy for the one to do though
We almost made the mistake of using a home equity line of credit to invest. Thank goodness an uncle told us not to do it. We would have lost it all. I agree that 1k isn't enough and we now have a 2k emergency fund. We have a separate account with 3 months of living expenses (in Hawaii) and we have 12 sinking funds that we fund each month. They are, debt snowball, car maintenance, car registration, appliances, house maintenance, vacation fund, toiletries, puppy, special occasions, fund raisers, medical/drug co-pays, and hair care. We haven't put any money into hair care since the pandemic because I've been cutting hubby's hair and he's been cutting mine. He will go to the barber for our son's wedding and then I'll resume cutting his hair.
for me 7000 is the minimun emergency fund.
We knew so many people who got on the bandwagon to use home equity to fund their stock market investing. This was back in the early 90's. You have a wonderful list of sinking funds. We're going to share ours on an upcoming program. We have 10 sinking funds. How wonderful to live in Hawaii. But, the cost of living is quite high there.
ER fund is liquid and needs to be accessible build it up and only in an emergency......
Love the medical basic Sinking fund, thanks
Hi, Cowgirl. We always enjoy seeing your comments on the channel.
Please tell me where I should keep each sinking fund. Do I get multiple bank accounts or do you put cash in envelopes?
What do I do?
Chris, great question. We keep them all in one account (except the car replacement fund, because it's pretty large. So, it's in a separate account by itself.) We track the sinking funds on paper. We use cash envelopes primarily when our grocery fund gets out of whack. But, cash envelopes are good for other things like your clothing and gift sinking funds, if you choose to use cash envelopes for them, too.
Before touching your emergency fund,call your insurance provider.many home or vehicle repairs might just be covered. Something to consider.same with medical emergencies
Yes, that's a very important cautionary note. Thanks for adding that to the discussion.
I rent a government house with my 25 year old twin daughters the three of us are on disability pension we have twelve months fully funded emergency fund I live a crucial thrifty simple money saving life
I agree with you that $1k isn’t enough but if you listen to Dave his whole point is that it isn’t supposed to make you comfortable. It’s supposed to be there to help cover a minor emergency while you throw everything possible at debt. And it’s precisely that feeling of “this isn’t enough “ that propels you forward . His program is based far more on the psychological aspect of debt repayment than practicality sometimes but it works.
Dave has had this same amount, $1,000, as an emergency fund for 30 years.
Thirdly years ago it made sense, today it does not...
If what you are saying is to believed then he should have HD the emergency fund (30 years ago), set at a hundred dollars.
Dave’s way does work or he wouldn’t be in business - what is most sad is by following him so much money is lost to the follower that most just don’t realize.
And I’m talking thousands.
HVAC purchased last July out of regular savings not emergency fund. Southeast in July? That’s a definite emergency IMO🥵🥵! What’s your opinion on those $200 annual “cleaning/maintenance” policies they try to sell you?
We actually have had one for years. It's $165 a year. We get a discount on the annual inspection of the furnace and the AC. We also get a discount on labor if something needs to be fixed. We are friends with the owner of the company and we trust him. That's most of the reason we did it. The company was just sold a few months ago. So, we'll see if the new owner offers the same agreement.
We never ever did home equity loan on anything
Great job! Really enjoyed this video 😊
Why not use the credit cardc for whatever points tou can get and then pay the credit card soon after
I just subscribed to your channel. Frugal Jo gave you guys a good reference on her channel. I just want to say thank you for being decent and nice and friendly. You might not realise, but your behaviour truly shines the light of God into this world. You do make a difference. I just got so tired of following channels on which the hosts are sometimes condescending or even mean, all while they talk about being christian. I unsubscribed from them and now only follow channels like these.
Dream of Skye, Frugal Jo is such a lovely person. I enjoy watching her, too. Thank you for your kind words. We are delighted to have you with us. Welcome to the Under the Median family!
That's so nice, Dream of Skye. Thank you so much for your kind comment. Welcome aboard. So nice to have you with us.
It seems like a new system would save money on use costs.
Loving this episode ... Sinking Funds ... would you be willing to share your other amounts for your Basic Medical Care and Home Maintenance?
Yes, we are planning a video on sinking funds and we'll share what our sinking funds are and how much we have in each fund. As far as medical goes, we have really high deductible insurance. Our yearly family deductible is $8400 or $4200 per person. We have a Health Savings Account through Larry's employer and we try to keep it stocked with enough for at least one deductible. We have a home maintenance sinking fund every year of $1500. It's actually usually pretty tight with that amount. So, I may lobby to making it $1800 next year. The rule of thumb is 1-2% of your home's value for a home maintenance fund each year.
Also, you used your EF after a layoff correct? What’s your opinion on layoff insurance?
Larry was offered some free lance with the company that he had worked for to tie up some loose ends and he found two part-time, short-term gigs. So, we didn't actually need to use the EF. I think it was about two months after he was laid off that he found another full-time job. It was a 40% pay cut, though. So, our belt was tightened in a hurry.
Hi hope and Larry I wanted to know hope how do i keep my sweet potatoes from spoiling and rotting? I put them in a brown paper bag and sealed it up and then put it in my cabinet where it is dark, do I have to put the potatoes in a cool dry place? what would you suggest? also onions are ok in a bowl in a cabinet where it is dark. sometimes they spoil and rot but somtimes they last. so what would you suggest as to how to store onions, and sweet potatoes?
You are storing them correctly. Sweet potatoes just don't last as long as baking potatoes. A cool, dry place at a temperature between 45 and 55 degrees is perfect. The fridge is too cold for them. This time of the year is tough for sweet potatoes. I would suggest you plan to use them up quickly. The life span of onions is affected by how well they were hardened off - the process by which they are dried. I've noticed that onions from the farmers market sometimes rot pretty quickly. I would suspect it's because they were freshly dug. They absorb moisture and the outside skin can get slimy in the fridge. So, the best place to store them is the same conditions as the potatoes - cool, dark, and dry. Like potatoes, make sure that they are kept dry.
We have our original deep freezer in garage 1984 model. We have my mother in law's that is newer that we aren't using. I've wondered if we should start using our newer one to save electric.
A cousin gave us an ancient freezer which we used for a couple months. After a defrost the gasket failed and was too old to replace (size no longer made). Our electric bill went down considerably the month after it died. So I compared the bills with the freezer to the previous year's and found the freezer had doubled our bill. There's no way the extra freezer space paid for itself in grocery savings. So yes, use the newer freezer.😏
@@oliviafox3310 I may switch them out and compare ❤
I discovered the importance of an emergency fund this summer when I fractured my foot and couldn't work for a month. I had to use some of my emergency fund and I am thankful I had it...I agree that emergency funds should only be used as a last resort...How do you feel about borrowing money from a friend or family member for an emergency? Would you take money from your parents or relatives to help with an emergency if they offered?
Maybe parents but only if they were financially self sufficient. Definitely wouldn't take from anyone else if I can avoid it
A financial expert im friends with said its best to have at least 2 to 3 years of bare bones savings .and an emergency fund of at least $5,000.why does he preach this? 2020.need i say more.and what he means by bare bones,4 walls.shelter.heat.lights.basic food.trasnsportation.medical.
Absolute needs for survival.anything else can wait
Can't go wrong with that, Rochelle.
A guy gave us a quote on new HVAC. I asked what the price was for paying cash. He knocked $1500 off the price.
Great tip. Always ask if there is a cash price. We just paid for our youngest son's braces. They gave us a $500 returning patient discount and an additional 3% cash discount.
Do you recommend investing while you are building up your emergency fund? Or should you wait to invest until you have a 6 month emergency fund?
I hope I don't have to use it. I like it where it is at. It is my friend. I need an emergency fund for my emergency fund :)
Yep. We hope to not use it either. But, it's nice to know it's there if we need it.
Hope,Larry do you have separate bank accounts for your sinking funds.
Yes and no. We have some separate accounts for some funds (car replacement is one of them), but most are tracked through Dave Ramsey's software.
So glad the trees didn't hit the house but expensive to remove for sure.
The big one in the back was really close to the house. We were unbelievably fortunate that nothing hit the house.
Hope you look fabulous in your blue, and your necklace did u make it?
Thanks, Cowgirl. The necklace was from a thrift store.
Could you tell the ac was on its way out?
No, the H-Vac serviceman discovered it when he saw a pattern of a loss of Freon.
Are you ever going to start vlogging? Doing food prep with us???
I don't know. I do think that there's a lot to say about saving on food, but there's generally a lot of editing involved in food prep videos. So, we'll see.
@@UndertheMedian I'd love to see a what I eat in a day video by you guys but yeah there would be alot of editing I guess. ☺
$2000 is not an emergency fund. A true emergency fund is anywhere between 25k and 100k.
Nice outfit, Hope!
Thanks so much.
Yes. I think $1,000 is not enough. With inflation baby step 1 would be $2,000.
cars furniture Hallyday..restaurent clothing..are NOT e emergency fund :)
You could of rented a chainsaw and cut up the tree and sold them for firewood. That would have paid for the stump removal.
Good choice or poor choice.........
Christmas, Birthdays, etc. NOT emergencies 😂🤣 we know those are coming….I think people get confused at WANTS and NEEDS
You're right. Those are definitely not emergencies.