It’s been quite a while that I’ve been struggling with budgeting while wanting to secure 6 months of Emergency Fund for a household of 3 humans & a pet.
I’m gradually starting to build an Emergency Fund like most people having fixed & variable expenses combined. The only thing that differs is that I have a medical loan category where I pay ₱12,000 ($220) monthly on a 3-year term (36 months).
I am still to undergo medical procedures on top of this. I also want to build an EF of at least 3-6 months, which I commonly hear about on here.
The question is, in your budgeting technique, how do you set aside cash for your EF?
I need ideas. Feel free to comment. Thanks for your responses!
I think if you have dependents (sounds like maybe you have a child?), then it makes more sense to aim for 6-12 months (six should be the absolute minimum). You also want to take into consideration how stable your job/income is.
Anyhow, I have an emergency fund built, and I just have money go automatically from my paycheck into a high-yield savings account monthly until I build it back up. If it’s built up, then I divert that money elsewhere until I have to build my emergency fund back up again.
Rai said: @Riley
I’m single, physically challenged, and only have my mom & dad as dependents. So in your case, the EF is automated?
Yes, it is.
Also, I still think it would be to your benefit to have at least 6 months of emergency fund, but 9-12 would probably be better given that you also take care of your parents and have health issues.
Take your base paycheck—no overtime, just your normal take-home pay. Add up all your monthly bills. If you make $3,000 a month and your bills are $2,000, you have $1,000 left. Decide if you can afford to put away $500 or $600 (or whatever you can comfortably save), and put that aside and don’t touch it. The rest is for non-essentials like haircuts, coffee, eating out, etc.
