Do you have an un-invested cash ready emergency fund?

[diamondyes]

Why, or why not? Share as much detail as you like. As much as my jewelry collection is an “emergency fund” it is not cash ready! Ha! I know many of you are very responsible with your money, I’d love to hear how you approach this aspect of life. If you could use percentages or timelines that would help me get ideas on what I should do.

 

[chrono]

I keep 3 to 6 month's expenses emergency cash in an online bank that I can access within 3 days or so. This is separate from my usual monthly expenses and also separate from retirement savings.

I did not have this much cash in my early years but my parents insisted on how important it is. It took many years to get up to this level of savings. Year end bonuses, extra cash is socked away so if I don't see it, I don't miss it.

 

[Lookinagain]

Yes, I do. I keep quite a bit. But I'm close to retirement and it's more important to me to not have to sell anything to live, rather than look for a lot of growth. I've been through the financial crash and about the only thing I didn't loose money on was my cash. If I had needed to sell before things recovered, I'd have been quite bothered. I was still working back then, but probably won't be after next year. So I do keep a lot of cash. probably about 10-15% of my total. I also think that a persons age affects how much cash they should keep on hand vs. having it invested. I guess they say about 6 months living expenses for most people, but longer if you are close to retirement. So I go with longer.

 

[MamaBee]

Age does matter. We are retired so it’s different..I would say if you are young..and still earning money at a job..keeping six months of salary liquid would be safe.

 

[yssie]

Six months’ cash. But six months of “worst case animal health scenario”, which is more like a year of “normal”.

Frankly given my portfolio’s performance this year I’d have done better shoving money into a mattress. (Yeah, I know that’s not exactly true, but… )

 

[RMOO]

We have a few years until retirement, and have two years salary in cash. This is the cushion that will allow us to time when we eventually start to withdraw from our 401ks.

 

[lala646]

I could live for a year. I have most of it in a high-yield savings account (lol, sure.), and occasionally will put some of it in CD's. Given my age, I have no reasonable need to have so much sitting in cash, but money is emotional, and having that cushion is what makes me comfortable. It drives my investment advisor absolutely batty, but I always remind him it's MY comfort that matters.

 

[Kim N]

Frankly given my portfolio’s performance this year I’d have done better shoving money into a mattress. (Yeah, I know that’s not exactly true, but… )

Same.

 

[elizat]

Same.

Seriously. It's difficult to see the losses and just to be told to keep putting more and more in and ride the wave up. I know that's the logic and I have 20-25 years before I can retire, so a lot of time to make it up, but sometimes I'd really rather have the money now! Still just diligently saving though.

 

[diamondringlover]

probably around 6 months worth of cash.....

 

[missy]

Agree with @MamaBee depends on age and where you are regarding retirement. For us we have about a year in liquid assets and the rest invested. Anything more (or us) seems wasteful for us since the money isn’t working for us.

 

[dk168]

The film "It's A Wonderful Life" is my inspiration - it's good to know a local friendly pawn shop.

Otherwise 3 months' cash.

DK

 

[kgizo]

We follow the guideline of 3-6 mo. If we know we’ll have a big expense in the next 12-24 months we’ll often do a CD or something similar to mature at that time. One thing to think about is if you live in an area prone to natural disasters or the like. 1) there might not be electricity / internet to do a CC or online banking, and 2) some businesses prioritize customers on their ability to pay cash. Consider a wall safe and keeping cash on hand in case you ever need to do a quick evacuation.

 

[diamondyes]

We follow the guideline of 3-6 mo. If we know we’ll have a big expense in the next 12-24 months we’ll often do a CD or something similar to mature at that time. One thing to think about is if you live in an area prone to natural disasters or the like. 1) there might not be electricity / internet to do a CC or online banking, and 2) some businesses prioritize customers on their ability to pay cash. Consider a wall safe and keeping cash on hand in case you ever need to do a quick evacuation.

Oh that’s interesting! I hadn’t considered that. I appreciate the idea.

 

[Arcadian]

Being here in FL, the answer is yes. Its a must if you can swing it, cash is going to be key. I don't rely being able to getting to a bank in those cases, and if you don't have electricity, then you can't run a card reader.

 

[monarch64]

Seriously. It's difficult to see the losses and just to be told to keep putting more and more in and ride the wave up. I know that's the logic and I have 20-25 years before I can retire, so a lot of time to make it up, but sometimes I'd really rather have the money now! Still just diligently saving though.

Becoming a “Boglehead” has helped me (mostly) avoid obsessing too much about the market. I tend to peek on days the Dow is up, though. Lol

 

[April20]

I have about 2 years of liquid savings that would cover our current living expenses without cutting back. I've got other money squirrelled away in a bunch of less liquid places but i could still get to a good chunk of it if the bottom fell out.

 

[nala]

A year easily accessible that could cover me for 2 years if forced to budget. Plus I purchased disability insurance and combined with my sick day accrual, I have a solid 3 years that could be stretched to 6 should I become disabled. One of the perks of being a teacher is the job security—I have never been laid off in my 26 years of teaching and am protected by the union from being fired at will. Another perk is the pension and sick days accrual. I have been lucky to have been blessed with good health so far and am committed to my profession so I don’t squander my sick days on fun days bc I have enough time off in the summer and winter and spring breaks—another perk of teaching—which means that I’m set bc I can retire as young as 53. So I’m good. The key too has been avoiding debt. Lucky so far and strategic as well. I don’t care to invest in a rental property or vacation home as some of my close friends suggest bc they have done it. But the opportunity cost of using that money to enjoy life or to just invest less stressfully is not worth it to me. Being debt-free is priceless and I only need one home. I like to vacation around the world so don’t need to limit myself to maintaining another home.

 

[Piper70]

A year easily accessible that could cover me for 2 years if forced to budget. Plus I purchased disability insurance and combined with my sick day accrual, I have a solid 3 years that could be stretched to 6 should I become disabled. One of the perks of being a teacher is the job security—I have never been laid off in my 26 years of teaching and am protected by the union from being fired at will. Another perk is the pension and sick days accrual. I have been lucky to have been blessed with good health so far and am committed to my profession so I don’t squander my sick days on fun days bc I have enough time off in the summer and winter and spring breaks—another perk of teaching—which means that I’m set bc I can retire as young as 53. So I’m good. The key too has been avoiding debt. Lucky so far and strategic as well. I don’t care to invest in a rental property or vacation home as some of my close friends suggest bc they have done it. But the opportunity cost of using that money to enjoy life or to just invest less stressfully is not worth it to me. Being debt-free is priceless and I only need one home. I like to vacation around the world so don’t need to limit myself to maintaining another home.

My husband is a contractor so we have to maintain cash in the bank for bonding. He would love to be debt free but we can’t because of the bonding. We just went into more debt to purchase a vacation home because of his work schedule making it hard for him to be out of touch. Though, a vacation house in South Jersey where we are is about as close as you can be to a fool proof investment.

 

[oncrutchesrightnow]

Why, or why not? Share as much detail as you like. As much as my jewelry collection is an “emergency fund” it is not cash ready! Ha! I know many of you are very responsible with your money, I’d love to hear how you approach this aspect of life. If you could use percentages or timelines that would help me get ideas on what I should do.

Yes. I don’t care to give details but if you are looking for behavior changes, direct deposit helps promote a habit of saving.

 

[Begonia]

3 months cuz we just paid off our house, but usually 6 months.