Tuesday, November 1, 2016
Emergency Fund Planning
Being married to a financial planner (yay and not so much) I really do not have to worry about doing the thinking on this one. Hubby handles all the long range stuff and I make sure our bills are paid. But I do know where our Emergency Fund is and how much it needs. Being that we are both planners this fund has been around for a while and has increased as life has changed (welcome the kids and the larger mortgage payment!)
Generally speaking, 3-months income is what you should keep in your emergency fund, give or take. Ours is a little higher because, well I think the type A Hubby likes the extra cushion. Check out this article for some info on how much you should have in your Emergency Fund. It not only covers how much you should save but ways you can build your fund. Bonus tip: start with what works with your life, you don’t want your saving to overcome your happiness. There are financial companies like Earnest, that allow you to refinance student loans and customize them to fit your life. You can skip a payment or change how much you pay monthly at any time!
The next question is where to keep your Emergency Fund, there are tons of options here as well. This article covers those nicely. Hubby and I like to have it split in a couple places so we keep some in our Online Savings Account as well as some in an Investment Account (we like to make our money work for us when we do not need it!)
While it is not always fun to set money aside in these accounts I think it makes “emergencies” a little easier to take when they are not also a financial burden.
Thanks to Earnest for providing this valuable information to share with you all.