How Big an Emergency Fund to Save Up?
This morning’s post was a bit scattered, and I also realized I didn’t clearly state my goal for the big emergency fund or how I reached that number. It may have been too much coffee, or just too much excitement at being able to double the amount of the emergency fund with one deposit LOL but I had the thought after rereading it just now I should do some clarifying.
My Emergency Fund GOAL:
My goal for the big honkin emergency fund total is $11,000 worth of principal. It’s a nice round number, and better yet it’s five figures :) That’s my target, and right now as of this morning we have saved up just shy of $3,000! I want to get the next $8,000 put into the emergency fund by August 3rd, 2008 or sooner. I typed the goal and it is now public, so I feel obligated to make it!
Deciding How Big the Emergency Fund Will Be:
That figure for the big honkin emergency fund is two things: three months’ worth of household expenses and enough money to replace my antique furnace/AC unit.
- Why only three months’ worth of household expense? Well, hubby is active duty Army, and is talking with re-enlistment about signing another three or four year contract. With two wars going on, I highly doubt he’ll get laid off any time soon. If he does become injured to a point of disability, I already know how long it takes to get a medical discharge and how to work with VA disability claims (and appeals). If that does happen (I HOPE NOT!!!) we will have plenty of time to stop whatever money project we have going and save up for a protracted battle with VA if needed. One month household expenses is approximately $2200, so three months would be about $6600.
- The furnace/AC unit is at least old enough to buy alcohol in all 50 states since it takes parts made between 1982 and 1987, so it’s a matter of “when” we need to replace it, not “if” it needs replaced. About a year ago I got an estimate of $4500 to replace the unit and fix the out-of-specs ductwork. Since I deal with the owner of the heating and air company, I think I could work out a cash discount when that time comes.
There’s my publicly stated goal, a target date to achieve that goal, and the reasoning behind how I got the amount I feel I need for my big emergency fund. Of course I will be tracking my progress right here on the blog 
so y’all can follow along and bust my chops when you feel I am getting lazy LOL And there is one more thing to cover:
Potential Obstacles to the Goal
Simply put, my potential obstacles to this goal both live here in the house with me: hubby and son! Hubby is itching to “do stuff for the house” now that we are out of debt. He also wants to take a vacation in the early summer since his unit is scheduled to deploy to Afghanistan in the fall. Son wants a membership at the Y, a larger weekly pay for chores, and of course a larger food budget.
All of those items are currently under negotiation at present. Of course, I could end up writing a whole ‘nuther post just about the negotiation and compromises when the family is not as “pedal to the metal” driven as the nerd of the house … but I’ll save that for another day.
