If I may jump off-topic for a moment, I went on a similar diet to maat55. No Pepsi, lay off the sweets, don't overeat. I've lost 11 lbs so far. I am shooting for 1 lb/wk all year. Wish me luck.
Back on topic...
I have been keeping a 6 month EF in savings, but I think I will reduce that to 3 months, max. I am starting to question whether the the likelihood of an extreme emergency that would require half a year's expenses justifies having that much tied up in cash.
I keep 0% CC transfer offers handy for major unexpected expenses. That would extend payments over 1 yr+. Together with unemployment and disability coverage, most minor dilemmas should be covered. In case of a true emergency, I would eventually have to cash in some stocks.
Like any investment decision, it is a balance of safety vs. risk. If the market continues to erode and I can pick up some good values at 30-40% or more off their 2007 prices, I think I will be raiding the EF.
|