Daughter said it was 48F in Berkeley this morning; she wore the plum sweater and it kept her nice and warm. I'm glad I gave the sweater to her because she needed it more than I (it was 64F here, this morning; our high was 75F while her high was 64F.)
After I came home from work, I did a load of laundry, did a load of dishes, emptied the kitchen trash can, and knitted another hat:
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| Hat #4 |
One of the things I talked about with daughter, today, was budgeting. We were discussing emergency funds and how much one should have in an emergency fund. When I first started budgeting, I had read that one should have at least $1,000 in an emergency fund. Then, I read that it should actually be at least one month's salary but single parents should have three months' worth of salary in an emergency fund, the presumption being, in a family with two wage earners, there was a higher possibility that if one is laid off, the other might still be employed and able to pay the bills, whereas in a single parent family, the single parent is the sole wage earner. Later, when the economic slowdown occurred and it was harder to find re-employment as quickly, the accepted wisdom was to have three to six months' salary in an emergency fund and up to one year's salary for single parents. I remember sitting down and going over my monthly budget to come up with a "bare bones" budget, in case I got laid off from my job! Fortunately, I didn't get laid off and I was able to continue to pay for extras and small luxuries such as daughter's dance classes and our eating out on occasion.
Today, I am grateful for:
- Being employed in a fairly secure job
- A steady salary
- Being able to live within my means
- Savings for emergencies and other planned expenses
- Being able to have these types of conversations with daughter.
Do you have an emergency fund? If not, is it something you are trying to build up? If you don't have an emergency fund, how would you handle an emergency? How would you pay for it? Would you put it on a credit card?
I have read that you should have 1 year minimum of expenses and 2-3 years would be better for an emergency fund. We have always had smaller houses and older cars than our income could support, so we could fund our emergency fund. I'm not a big risk taker with anything, including money, so having an emergency fund does more for my mental health than a nicer house would.
ReplyDeleteI, too, have read that, Live and Learn. I also know of people who would be hard pressed to come up with $1,000, let alone a month's worth of expenses, never mind a year's worth! Like you, I, too, live below my means in order to fund my emergency fund and other savings accounts. It's worth it, to me.
DeleteNo emergency fund here but I would like to have one in place. Even though I'm lucky that we don't really need one, it would still be nice to have a certain pot allocated for such things without dipping into our main money.
ReplyDeleteYou'll be pleased to know I can pretty much account for most of my expenditure these days. I think I've said before money slips through my fingers and I don't ever seem to have anything to show for it - well that's still the case but at least I know where it's gone :) xx
Suzanne, well done on knowing where the money is going! That's an important tool, I think. If you are comfortable with what you are spending and on what, then, that is fine. But, if you want to make any changes, then, you have the knowledge you need to make those changes. Maybe one of those changes might be cutting back on some of the expenses to put towards that emergency fund! :)
DeleteMy husband and I do not have an emergency fund anymore. We used it in the past to help pay for medical bills. I am hoping that once our home is paid off in a few months that we can get one fully funded again.
ReplyDeleteI'm glad you had the fund to help pay the medical bills, Debbie. That's the whole purpose of having an emergency fund, isn't it? I hope you will be able to build up another emergency fund in the near future. How marvelous to be close to paying off your home! Well done!
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