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Does your efund calm your fears?

October 16, 2008

The other day, my neighbor told me he has never paid his rent on time at our complex. He said it was “because of the way [his] paychecks lined up”, and paid $85 late fee each month. He also told me he never paid the bill we get for water, sewer, and trash, because “what are they going to do? Stop picking up the whole building’s trash?” So he simply ignores the bill. It sounded like he even called the company and asked them what they would do! Wow!

From that conversation, I concluded he was one of the many Americans living paycheck to paycheck. Do you think they worry more or less than those of us who are money obsessed focused, yet have cash in the bank? Well-Heeled has collected $21,200 cash, and is grateful, but still anxious about what may come. I wonder what amount in the bank would make me feel completely at ease? Fifty thousand? Would that do it?

I’ve reached my (revised) 2008 goal of $13,000 and am setting a new goal to reach $14,750 by the end of the year. If I save every dime (and find some extras), I could reach $15,000 by the end of December. That is my reach goal.

In terms of how long I would last if my income dried up, I’m not sure. I’d ride out my lease until February, then I’d move, presumably illegally (campus housing) in with T until we could move elsewhere (which is the longer term plan anyway). I could contribute “my share” of expenses for almost a year. If that were impossible, I would try for a different shared housing situation. Given all that, it is hard to figure out how long it would last.

Moving home would be a really poor option (2000+ miles!), but I do know that T have saved/invested like an 80 year old, thus has some cash reserves and would help if needed. It is surprising to realize that for the first time in my life, my parents wouldn’t be the first I’d turn to. But honestly, I think I could find a job before it would ever get to that.

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9 Comments leave one →
  1. October 16, 2008 10:08 am

    It does, and it doesn’t. It staves off panic as the economic climate grows darker, but I keep finding myself revising the numbers upward: “20k is good for six months, but that’s just for one household. If I want to move out, I need an efund for TWO households!” and so on. I’m going to have to bite the bullet and wrap up e-fund savings contributions temporarily, but I’m distinctly uncomfortable with the idea of moving out and not having enough to cover myself plus my parents’.

  2. October 16, 2008 10:18 am

    lol. I just posted something along similar lines (about my nervousness, really). In short, no….I feel my $5 emergency fund isn’t enough for very long once I move. As it is right now I have nothing to worry about, I want to move out on my own soon. If it was more substantial then yes, I’d feel better. Perhaps with a year’s worth of expenses?

  3. October 16, 2008 10:38 am

    $10k would do it for me now, but $100k is my ideal

  4. October 16, 2008 3:47 pm

    Your neighbor sounds like an idiot and not a very good citizen. Probably and reasonable conversation with the landlord explaining his payment situation would allow him to pay rent on a different day AND save $85 every month. I wonder if he does that with his other bills. No insurance payment? “What’re they gonna do? Not let me go to the doctor.” Ummm…yeah!? I hope you reach your goal. You’re focused (not obsessed) and that will lead to your reaching it.

    Jerry
    http://www.leads4insurance.com

  5. Bonnie permalink
    October 17, 2008 8:26 am

    I was laid off from my job 6 years ago and had $0 in an emergency fund. I would have been living on the street if my parents hadn’t given me some money until I found a job. It’s a humbling experience and one I never want to go through again. I hope I am in much better financial shape if that ever happens again! Three months is the absolute minimum e-fund you should have, and in this economy, six months or more (maybe even a year’s worth of expenses) is the ideal.

    Don’t move home. You are living in a dream city!!!

  6. October 17, 2008 11:57 am

    I can’t believe your neighbor admitted to such a bonehead move! As to always paying late because of how checks lined up – sounds like he needs to reset during one of the longer months when most people get an “extra” check. Some people just don’t think.

    As to emergency fund – I have about a year’s worth saved up but no insurance. I’m always worried a medical emergency will cripple me.

  7. October 17, 2008 3:33 pm

    Does my efund calm my fears.

    Absolutely.

    Again, this past week, another large portion of my department got laid off! And, again, I was a nervous wreck, wondering exactly what I would do if that happened to me.

    … and then my efund calms my fear. Honesty it does! I am so glad that if something drastic took place financially for me, at least I could put food on my plate and a roof over my head for x-amount of months.

  8. October 18, 2008 12:01 pm

    Mine definitely does. It’s nice to know that I can cover school and living expenses if I get laid off. To feel like I have enough money where I can really walk away, though, I think I’d need a lot more. I’m in the same boat as you – if I lose my job, I can rely on Chad, but the cheapest option would be to move back in with my parents and ‘m not sure I’d want to do that….

Trackbacks

  1. Reductionism in all things (except the e-fund) | A Gai Shan Life

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