Tuesday, September 27, 2011

Emergency Fund?

When the recession hit starting in 2008, all media outlets preached that households need to set up an emergency fund that can cover six months worth of expenses, in case of emergencies such as layoffs or unemployment.

Well, I've always kind of brushed that off, especially considering that Dustin and I are both fully employed, and by the government no less. Unless you really do something to mess up, jobs in the military and education field have always been viewed as stable and guaranteed. Change that equation since Dustin is considering ending his military service, or the fact that we could very well receive a change of station even if he re-enlists, and it really has got me thinking. Maybe we need to work on a hefty emergency fund after all.

Now, first of all, do I think six months of expenses is really necessary? No. I mean, if we were a one-income family I would say definitely, but I would really hope that we would never BOTH be unemployable for the same six months!

So I decided that we are trying to get together three months' worth of expenses in emergency fund. This would mean that we could float along just fine for three months with both of us being unemployed. And if only one of us is unemployed, we could probably last for around nine months.

So how much would we need to save up? Well, we spend a lot of money, so we are shooting for a $10,000 emergency savings fund. We wiped our entire emergency fund clean over the summer since I don't get a paycheck in July. So, since I am back to school and saving, we are up to $561 so far. Let's hope we can keep saving on a regular basis, while still putting away money for our future (date uncertain) house! I think once Dustin deploys and our expenses go down a bit (just paid off the washer and dryer, yippee!), then it will be easier for us to pocket some of that extra cash. Right now my little mint.com goal tracker is telling me we will reach our $10,000 goal in April of 2013.
Not too shabby. Although, I have to say looking at that long empty stretch we have yet to go, it feels like it's going to be a long 17 months. I had better start cooking some more so we can save some moolah!


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