Comments on: Here’s Why You Should Ideally Have Four Emergency Funds

By: MoneyEnergy

MoneyEnergy — Sat, 11 Jul 2009 23:13:31 +0000

@Alex – I’m working towards them. I have at least two started, though one of those I might be changing into a specific savings account. As for amounts, it’s going to be different for everyone. Best to do up a budget, then factor in projected inflation to get the numbers.

By: Alex

Alex — Sat, 11 Jul 2009 21:10:39 +0000

The first two can be covered in an HSA.
Great post. Do you have these emergency funds, and if so, how much money do you have in each one?

By: MoneyEnergy

MoneyEnergy — Wed, 29 Apr 2009 04:53:35 +0000

@Nancy – thanks for stopping by the blog! I think it’s great you have a fund just for your dog, very responsible. I’d do the same, I think, if I had a pet. I’d also want to be in control and not worry about what the insurance company will and won’t cover.

By: nancy (aka moneycoach)

nancy (aka moneycoach) — Wed, 29 Apr 2009 03:56:09 +0000

Wild! I *just* reviewed my own savings accounts tonight. I have an emergency fund but should define some parameters re: what constitutes an emergency.

I also have a separate “pet” emergency fund – I regularly contribute the equivalent of pet insurance, but prefer to have complete control over the fund (eg. not haggle about if my dog’s injuries are covered. Note to insurance companies! Lots of us feel that way!)

By: MoneyEnergy

MoneyEnergy — Wed, 29 Apr 2009 02:50:26 +0000

@Brett – sorry about the injury, nothing better than losing our normal abilities to make us appreciate our health. Judging by your site it looks like you’re well on your way to improved financial flow!:)

@Steve – ironically, right now I don’t do automated savings due to the sporadic nature of my income. But the above categorization is still something I’m working towards. When I move to a salary, I will automate.

@Rick – yes, ideal as in a goal to work towards. It will take some time to actualize it! I’ll start small and snowball my way up, like everyone else! I have the small fund started, anyway.

By: Rick Vaughn

Rick Vaughn — Wed, 29 Apr 2009 02:03:00 +0000

Money,

As you said this is a “ideal” situation. Certainly, you give a great method to save and form in which to do it.

By: Steve

Steve — Wed, 29 Apr 2009 01:40:19 +0000

This is an interesting post. I’d like to have some idea of how you get this done on an automated basis. Do you do automatic debits into an account like ING?

By: Brett Borders

Brett Borders — Tue, 28 Apr 2009 17:59:45 +0000

Oh man… tell me about this! I am an independent social media consultant and speaker and I recent got injured, which has made it difficult to land new work. As soon as I heal and get some financial flow going again…I will definitely set up a combined health + contingency fund to start… and then separate them into different funds as my means increase.

Take this advice!

By: MoneyEnergy

MoneyEnergy — Tue, 28 Apr 2009 17:35:47 +0000

@InvestSound, @Imee – you raise good points that matter if one decides to invest the funds differently. Liquidity is obviously very important, and physical protection too. One could maybe rank the funds according to what you need most safe (indeed, willing to lose to inflation on) and what would still be ok for keeping in a money market fund at a bank (where it takes maybe two days to get your money).

eg., for a job loss situation, I’m guessing it’s probably OK to have your fund in the moneymarkets if you know it only takes 2-3 days to get the money out and back into your chequing account. For an emergency flight home, though, you’d want this in instant cash that one phone call could transfer back onto your credit card or chequing account.

Thanks for these extra points! I’ll have to incorporate them into my edit of the post.

By: Imee

Imee — Tue, 28 Apr 2009 09:20:47 +0000

I was brought up by frugal parents, so I always had extra money in my pocket for emergencies. I also had the mindset of “always save for a rainy day,” so this is nothing new to me. I’d prefer having these four emergency funds in my own safe though, rather than in a bank.