[disneysteve]

Originally Posted by sweetZ4me

One question for those who mention the emergency fund being at 3 months-- we currently have the 7K and you mention building it to 12K (to cover that 3 months). But, I have been looking at my emergency fund for ONLY living expenses

So....should I really have 12K in the fund when my monthly budget's "true bills" are about half (or maybe a little more?) I really don't know and would appreciate your input abou that.

I added up what appear to be the fixed costs and it comes to about $2,700. I included internet/cell/phone/dish because I didn't know if you are locked into a contract with those services. Add in a few hundred for miscellaneous stuff that you'd still have to pay and let's say your minimum monthly expenses are $3,000. So a 3 month EF would be $9,000.

How much of an EF you need depends on various factors like how secure your jobs are, what other savings you have, how much you could cut spending in an emergency, etc. For example, if one of you were to lose your job, would you stop the daycare and just have the unemployed partner care for the kids at home? If so, that drops your monthly expenses by nearly $500. However, what if the emergency doesn't involve a job loss. What if the car gets wrecked? What if one of you gets injured and is unable to work? Do you have adequate disability coverage?

There are a lot of "what ifs" in any family. Better to be over-prepared than under-prepared. And the typical advice is 3-6 months of expenses for an EF. Three months is the minimum. So for you, I'd say $9,000 at least, though nothing wrong with $12,000.