My Money, My Choices - Level 3, Activity 2

This activity is to set up an Emergency Fund...which Jordan and I have...but is it being used properly?  This is what Gail says an emergency fund is for:

Needing new tires is not an emergency. Nor is a new roof, that replacement hockey stick or a vacation. An emergency is a loss of income due to illness, layoff, or death. Stash the equivalent of six months’ worth of essential expenses for an emergency. Without an emergency fund, you’ll blow through your savings; you may even have to liquidate investments at a most inopportune time.

Jordan and I have definitely used our Emergency Fund for things that weren't included in this list...but not for home improvement, or a hockey stick.  We did use it when we had a tire punctured b/c we weren't planning on purchasing them yet, and we have used it for travel expenses for family emergencies (family in hospital)...do you think those things count?

Gail says we should have six month's worth of essential expenses...so what's essential?  I cut everything that I could (internet, cable ect.) that didn't have a cancellation fee (cell phones) and found out what my minimum payment would be on the mortgage and we're left with $4,347.  This includes shopping our monthly spending down to $800 - no more eating out, entertainment or alcohol...just gas and groceries.

So...is what we have gonna cut it?  Not so much...but this activity was just about creating the fund, not about reaching the goal so I'll check this one as complete.



Check out the My Money, My Choices program by clicking here.