Yearly Emergency Fund Review

Each year we take a look at our emergency fund and how long it would last us if we were to loose our jobs... because that's what an emergency fund is for! Each year we have some variable line items in our bare-bones budget that change in price (Insurance is a big one), so it's good to check in each year. Our goal is to have 6 months worth of expenses saved to help handle whatever the world throws our way.

As a reminder, an emergency fund should be used for unplanned events. That doesn't mean the holidays or traveling. These are things you should plan in advance for... I mean we all know that birthdays, anniversaries and holidays come at the same time every year. Set up a slush fund and tuck some funds away to cover those types of events throughout the year. A true emergency fund, on the other hand is designed to sit there. That way if an honest to goodness emergency comes your way (job loss, accident, etc.) you have the funds you need to get through it.

Emergency funds should also remain liquid and not be invested. You shouldn't worry about taking a loss, or selling shares to access these types of dollars. Keep it liquid and easy to obtain if you needed to get a hold of the money ASAP -- but outside your regular checking account so its not easy to dip into. We keep our emergency fund in a savings account that's linked to our primary checking account so we can transfer money and funds if needed, but we also can't just swipe a debit card or cut a check to access the funds in an instant. We would need to log into the account and set up a transfer first.

Our Emergency fund currently has $16,865.70 in it and this is our bare bones budget: (toddler would be pulled from daycare asap).

Both Unemployed
Mortgage and Prop Tax	$ 972.00
HOA	$ 350.00
Gasoline	$ 250.00
little dude	$ 50.00
Non food items	$ 50.00
Insurance	$ 180.00
Utility Bills	$ 160.00
Groceries	$ 333.00
Cell phone	$ 50.00
Car Reg	$ 25.00
Health INS - Covered CA	$ 707.00
	$ 3,127.00
Current Levels would last	5.39 months
Need $1,896.30	6.0 months

We also have $2,000 padding in our checking accounts, so i'm not too worried about adding more to this account this year with all the renovations we have planned (also because if I lost my job, my substantial PTO would need to be paid out). 

I'm also not sure about listing Health Insurance... We wouldn't use cobra because it's too expensive, but if we both lost our jobs, i'm not sure i'd decide to drop almost the amount of our mortgage on insurance... especially since it's no longer illegal...

and we would apply for unemployment which would bring in additional cash reserves.

More than likely, only one of us would be unemployed at the same time. Luckily, we plan all of our expenses based around my base salary... so if hubs quit or lost his job, we could cash flow our expenses for the year without hitting our emergency fund at all. He would apply for Unemployment and job hunt while watching little man.

Hubs Unemployed
Mortgage	$ 972.00
HOA	$ 350.00
Gasoline	$ 250.00
little dude	$ 50.00
Non food items	$ 50.00
Insurance	$ 173.00
Utility Bills	$ 160.00
Groceries	$ 333.00
Cell phone	$ 50.00
Gifts / Christmas	$ 100.00
Car Reg	$ 25.00
Fast Offerings	$ 20.00
Car Replacement	$ 100.00
Tithe	$ 440.00
	$ 3,073.00
My Checks	$ 3,228.00
Fun Money / Dates	$ 155.00
2 extra checks a year re-build savings
Stay at home dad covers daycare/preschool

Where it becomes interesting, is if I were to loose my job. I would have approximately 300-400 hours of PTO that would be paid out, which would inflate our emergency fund $7500- $10,000 before taxes... I make it a habit to keep a health stock of paid time off in case we A) decide to grow our family.... and B) to inflate my pension when I retire since I have a formula with 1 year final compensation... but that isn't factored below...

We would also probably see if we could get insurance through his work for less than covered California... or consider forgoing it as I mentioned above... But depending on when in the year I loose my job, we would/could qualify for health insurance subsidies based just on his income... which would make it only $3 a month if our income for the year is expected to be $40k or less....

I'd also apply for unemployment and job hunt while I watched little dude at home. Additionally we would also halt retirement contributions, which would inflate his take home pay more then is listed below (which is his current take home pay)....

IF I'm Unemployed
Mortgage	$ 972.00
HOA	$ 350.00
Gasoline	$ 250.00
Little Dude	$ 50.00
Non food items	$ 50.00
Insurance	$ 173.00
Utility Bills	$ 160.00
Groceries	$ 333.00
Cell phone	$ 50.00
Health INS - Covered CA	$ 707.00
Tithe	$ 216.00
	$ 3,311.00
Hub's Checks	$ 1,610.00
Short each month	$ (1,701.00)
Emergency fund lasts	9.9 months

I love our emergency fund and it let's me sleep well at night knowing we have been responsible and have taken the steps necessary to take care of our family.  It took us a while to get it to this current funding point... but looking back, i'm so glad we took the steps to save. If you don't have an emergency fund set up, start today. 

3 month emergency fund breakdown

Each year we take a look at our expenses and how they compare to our emergency fund. With fluctuating health insurance options and changing circumstances, it's always good to review where you stand each year to see if you need to add more to your EF as cost of living changes.

Our Current emergency fund is $16,700.00 -- all liquid in a savings account.

In the event of a double job loss, we would operate under a bare bones budget consisting of:

• Heath Insurance (Purchased through Covered CA) Silver HMO Health Net for 2 adults, 1 kid: $680.49 a month
• Mortgage/Taxes: $786.71 (no additional principal payments)
• Gasoline: $230.00 (Drive to find jobs)
• Eli Fund: $90 (Diapers/wipes, etc)
• HOA: $350
• Insurance: $167
• Utilities: $150
• Groceries: $333
• Discretionary: $50 (always have a little padding)
• Phones: $75
• Car Reg: $25

$2,937.50... so call it $3K. We have removed Clothing, Christmas, Birthdays, and itemized savings because we would be pulling money out to live on. So naturally, more scratch cooking and more frugal methods would be put in place in actuality, but I like round numbers and this is all for estimating purposes. Essentially, we would have 5 months with a $1k buffer. I think in practical terms, we'd be able to go a full 6 months easily because we could pull from our itemized savings (like vacation), and our checking account padding to come up with another $3k.

If my husband were to loose his job, and I to keep mine, we would operate a modified budget which would not have us draw on our emergency fund at all. Yup, you read that right. We don't over extend ourselves with consumer debt or push ourselves with a mortgage we can't afford. 

Our second income allows our lives to be more comfortable as we can pay extra on our mortgage, save a bit for retirement, and cover daycare and some small "perks" in our budget. We don't really feel "comfortable" with our incomes (as we are not in our forever home to say the least), but we are able to get by. We use our tax return and profit share checks from hubs job for larger purchases, which helps us feel less pinched during the year when wants exceed our monthly budget. But this strategy leaves our Emergency Fund for true emergencies. So much so, that we have not pulled from our emergency fund since before 2014 (as that's all the data records I have access to since we moved it from one bank to another). 

We also wouldn't need health insurance through Covered CA because we take that from my work, and with a job loss, we would eliminate daycare temporarily to reduce expenses and use drop in/half rate for job interviews when they arose (paying for it with discretionary funds). So we won't have a line item for savings or as much pocket money or date night money, or the ability for overtime or cash to accelerate our mortgage, but we could survive and still put 9-10% in retirement.

• Mortgage/Taxes: $786.71 (no additional principal payments)
• Gasoline: $230.00 
• Eli Fund: $90 (Diapers/wipes, etc)
• HOA: $350
• Insurance: $167
• Utilities: $150
• Groceries: $333
• Phones: $75
• Car Reg: $25
• Tithe: $426
• Car Emergency: $100
• Discretionary: $100
• B-day/ Christmas: $100
• Clothes: $52
• Eating out: $45
• Pocket Money $20 each / $40 total

Now, if I were to loose my job, we would move out of state and use our emergency fund to get us through while the condo sold. My work would also have to pay out my ample vacation hours, which are around 300 hours, giving my last paycheck a $7,000 BUMP before taxes... (Just saying...)

But we would take our bare bones budget approach and end up needing to pull $1650 out of savings each month since my husbands take home pay is around $1500 a month. At this rate, we'd have 11 months to sell our condo and re-locate... which should give him an opportunity to transfer his job from one state to another since they are a company with locations across the US so hopefully we'd move to a cheaper area, closer to family and one of us would have employment.

How do your funds stack up? Have you run the numbers on how much you need for a 6 month emergency fund? 

We made it! Emergency Fund Update

Despite the holidays and Christmas shopping, a $1,286.12 car repair bill, an almost $200 Vet bill plus medications and the itch to spend that always follows the holidays... I'm proud to say we were able to increase our emergency fund by the full $2,000 we were planning to do by years end.

For 2015 we will still need to add to it to bring it to about 6 months of expenses for our growing family.... but it feels good to make progress there. 

So what does 6 months of expenses look like for our family? (This assumes we both get laid off at the same time...)


Mortgage: $771.99
HOA: $295.00
Groceries: $300.00
Gasoline: $250.00 (to find a job)
Cell phone: $60.00
Utility Bills (electricity, burner cell, internet): $150.00
Insurance Savings: $ 157.99
Roxy Savings: $50.00
Doctors Savings: $50.00
Car Registration Savings: $25.00
Covered California Family Plan (Cheapest offered): $507.00

(the "savings" listed are our annual bills we pay broken down monthly which depending on when the layoff would occur, would could come due in a 6 month period.)

If we estimate diapers and baby stuff to cost us $100 a month and just round up a little...

We need our emergency fund to be $16,500.00.



If South County Boy were to loose his job tomorrow, we could get by with him being a stay at home dad to watch Eli and I could put the whole family on my work insurance plan, but it would be very tight since they only have fully covered plans. We would have to be VERY careful with not going over our budget and we wouldn't have money set aside for certain categories like we do now... so some purchases would end up coming out of our emergency fund and the only way to replenish that would be with 2 extra paychecks I get twice a year.

If I were to loose my job, after South County Boy adds the family onto his work insurance plan, we are only left with around $750.00 a month coming in, so we would essentially be pulling $1,967 out of our emergency fund each month.. and at that rate it would last us just over 7.3 months before it ran out at current levels. Once we get it up to $16,500 it would last 8.3 months.

Annual Goal Revision & Update

I thought it was time as i'm getting back on track to review our annual goals and make some amendments now that we are pregnant. This way we can get a good look at what we want to do with our income instead of somehow letting it slip through our fingers.

The original 14 for 2014:

1. Max out a Roth IRA for SCB for 2013 
2. Respect the Dirty Dozen and buy Organic 
3. Keep our EF in tack and round it up to $12,500.00
4. Participate in the Dumbo Double Dash w/ SCB 
5. Max out my Roth IRA for 2014
6. Max out SCB Roth IRA for 2014
7. Try to live off my income and save/invest SCB's. 
8. Visit family in Nauvoo Illinois
9. Save $1,000 towards a new car
10. Remodel our bedroom and closet.
11. Try 3 new vegetables
12. Toss a little more money to the mortgage
13. Be an awesome bridesmaid
14. Be better about doing more "Mormon" things.

I crossed off the items we have finished or are still doing...

We did meet the deadline for the 2013 Roth IRA for SCB and transferred $5,500 into a brand new shiny retirement account for him.

In an effort to get healthy, we have been buying mostly organic items, but definitely those from the dirty dozen list. There may have been a month or so in my pregnancy were it wasn't 100% followed, but I say its been a good change for us.

Our emergency Fund is sitting at $12,500.00, which is 6 months of a bare bone budget scenario where we pay just our mortgage, groceries, gasoline, 1 cell phone, utility bills, and save for our annual insurance, dog savings, medical savings, and our car registration savings. If you factor in the additional $2k we have as "padding in our checking accounts" we have a realistic 6 month Emergency fund if we were to both lose our jobs at the same time. The only thing this doesn't factor in is health insurance... which now it needs to with the new legal requirements. If only one of us loses a job, our emergency fund will stretch much further since we would still have income coming in and access to some type of health insurance for our family, so I won't worry about that for the moment. The problem would be if we both lose our jobs because we would only have one option for health insurance... Covered California.

• The cheapest plan would be $507 a month based on our area prices, which means we would need to save an additional $3,000 to have a true 6 month emergency fund since I don't like to include the checking account padding in the figures... (looks like I have our first 2015 goal in mind.)

We had to cross off the dumbo double dare when it sold out... and we ended up eating over $300 in our 1/2 marathon tickets because of our little goober and the august heat that made doing the 1/2 marathon a bad decision for me and SCB.

We also removed both goals for 2014 Roth IRA's. Its more important to get things done now and to save up cash if we can for the EF and for the baby for 2014 before attempting these items again. We are still doing SCB's 401k 6% with a 3% match... and my Pension which is about 8% of my income.

I think we have done well with only committing to expenses that fit within my income (AKA living on my income and saving SCB's)... I'll admit that we had a few spendy months recently, but we are getting back on track and its a good thing too with the holidays coming around the corner.

Some of our goals this year did focus on spending. We went on a vacation to visit family, finished most of the bedroom and closet remodel, spent the money on being an awesome bridesmaid, and spent more than 1600 on automobile repairs this year. I'm proud to say we have $400 in car emergency fund now. It might not be the full $1,000.00 we want, but considering how much we had to spend, i'm calling that goal achieved.

We did try 3 new veggies this year.. Jicama, Kale and fresh green beans. Technically I've had fresh green beans at restaurants or at friends houses, but I'd never cooked and prepared them and I did this year so for me, that counts.

As for more "church/Mormon things" we have been to 4 different temples this year besides our home temple in Newport (Nauvoo, San Diego, Mount Timpanogous, Draper, etc). Did some work and family history for my ancestors, and have made a point to make daily prayer with each other a bigger priority. Always room for improvement, but I like what we have been up to.

I didn't mark off "send some extra to the mortgage" because while i add a few cents each month, i've only tossed around $14 to the mortgage in extra and I feel in order to do that goal justice, it needs to be a bit more significant.

So where does that leave us?
Kind of done, (other than sending a bit of cash to the mortgage which doesn't seem as important at the moment so i'll probably just ignore it for the year...)... which is why its good to check on your goals throughout the year. Sometimes they change... and sometimes you blow through them early by being diligent. Sure, we deleted 11,000 in saving that we wanted to do... but we realistically knew that would probably need to carry over into 2015 again.

Since we still have 2 and a half months left of 2014... and we want to make the most of them, here's kind of our game plan.

• In October, Goober's nest/nook will be ready for furniture and baby stuff. 
• In November, SCB will get the murphy bed frame for our bedroom... and we plan to do a large food storage order to stock up on some better and more diverse basics now that we will have a bigger family and we like the idea of having more basics around the house to help keep costs down throughout the year. 
• In December I plan to have our carpets professionally cleaned because we have had the carpet for over 5 years and its never been cleaned before and some spots and walk ways are really showing their age and some stains. 

But here's the kicker. We would also like to add $2k to the emergency fund by the end of the year. 

• We are going to take the Roth IRA money we normally save and put it towards the Emergency Fund: October, November, December = $825.00
• We have $300 sitting in the Roth savings account right now after pulling most of the money out for our IKEA run... $825 + $300 = $1,125.00
• I have an extra paycheck coming in this month. We are hoping to take $800 from it and apply it to this goal. 
• That means we only need $75 to make it there and we are hoping by being good with our budget that we will be able to come up with that cash by years end.

If we save more, awesome... but we aren't planning to since we don't know how much we will end up spending as we finish projects up and we hunt for some more second hand things for the nursery nook.

Emergency Fund Update

I got to dump South County Boy's entire paycheck in our emergency fund... and now its at $12,189.47... or $20.47 away from being 6 months of bare bones expenses for us! It feels so much nicer to see that 12 out in front...

Already the air feels nicer and fresher... its good to have money in the bank!

Below is our bare bones budget if we both suddenly lost our jobs:

• Mortgage $771.99
• Roxy: $50.00
• Groceries: $250.00
• Prescriptions/doctors: $50
• Bills (Cell + Internet + Electricity) $150.00
• HOA: $270
• Insurance: $143.00
• Gasoline: $250
• Misc: $100

Total: $2,034.99 a month (times 6 months) $12,209.94. Eventually we will just bump it up to $12,500 just to keep it at a nice round number.

Back From Utah...

We made it back from Utah... It took us 13 hours on the return trip with all the weekend Labor Day traffic... but since SCB didn't have any vacation hours, we didn't feel right asking them to give him Tuesday off when he was getting Monday off already for the holiday.... so we bit the bullet and boy was it rough sitting in the car for 13 hours, even with our ample breaks for Roxy...

We got to visit with family and celebrate our nephew's 5 year birthday a couple days early... but this trip was really about getting things done.

Shopping.... Sewing... and Driving.... That's really what happened when we went out to Utah.

First, Shopping:
Since getting to go through the Temple last month, I have been having a lot of issues with my closet... which is a fairly common problem for most church Converts as I now wear more modest clothes to accompany the garments I received in the temple. My closet wasn't scandalous or anything like that before... but since i'm so short (I'm only 5'1"), my garments tend to run a little longer on me then they would on the average girl... even when I select petite sizes (petite sizes offer a shorter distance from the waist to the seam which is greatly appreciated, but they do not shorten in leg length from the regular ones).... and to make it worse, the fabric I like the best doesn't shrink in the wash like the others do so these things come down to my knee almost. I'm making it work and trying to make this a pleasant experience... but for the time being while I figure out what really works and what doesn't, we wanted to take the opportunity we had in Utah to shop and pick up some clothes from a few stores that cater to a more modest philosophy. Things like Cropped Shirts with a cap sleeve made for layering (they stop after your bra so they just add a sleeve without the bulk around your belly)... some Capri pants since I can't wear any of my shorts at present and its HOT in California... and a few tops I could toss on without having to layer...

Second, Sewing:
My whole shopping experience in Utah surrounded around wanting and needing a dress/skirt extender. if you have no idea what i'm talking about, here's a picture.

Photo from this etsy shop for $33.00

I wanted something to add just a little length to my dresses... but since my garments run longer, everywhere I looked I found the length was fine... if the added fabric WASN'T a see through Lace. Since I ran out of luck, I bought some fabric at Walmart and was able to make one in Black and one in White for only $25.00 for both!!!

Driving

Roxy hanging out in Wanda while we head out to Utah...
She was such a good dog and a little trooper the whole way

Oh ya, and yours truly drove a stick shift! I had about a 30 minute driving lesson with my brother in law on Sunday in an empty parking lot, and then back to his parents house... and then on Monday I drove around 140 freeway miles on my own!

• 140 freeway miles as in leave the gas station, hop on the freeway, get to fifth gear and just maintain speed for 130 ish miles, then slow down, get off freeway, navigate a "round a bout" and pull into a gas station... 

I'm proud to say that I not only was able to start the car on the first time (I peeled out a bit... but hey it started!!!) I ended up only stalling once when I had to stop on a hill and wait for cars to go by to get into the gas station... but I was able to start it up again on the first go... (I just burned a little rubber in the process... )


So i'll be learning more about how to drive a stick shift...

But we managed to trade cars, and get "Sally" back to California in one piece... We're still waiting for this "emission sticker" to come in before we can register her in California... but that should be coming soon. We ended up paying $2,000 for her and $1045 in repairs on the old car (his parents paid to fix the AC in the end, saving us that $600).

The Car aside,  Utah ended up costing us $551.50.

• $152.97 of that was clothes for me.. 
• $82.00 Clothes for SCB
• $38.81 on Eating out
• $46.04 on a trip to Walmart for fabric, a birthday present, and some odds and ends...
• $231.68 was gas, tolls and other car related expenses... 

Were taking $200 out of our vacation fund to cover the gas and the tolls (we rounded up since we are still waiting for some of the gas station pending fees to disappear)... and the Clothing money we were able to work into the budget since we didn't put any money into savings last month...

But with buying the car and doing the unexpected repairs to Wanda... our emergency fund is a bit sad...

6 Months of expenses for us is $12,227.94

• Monthly Mortgage: $771.99
• Dog: $50.00
• Groceries/House Items: $275.00
• Insurance: $143.00
• HOA: $270.00
• Cell phones, Internet, Electricity: $150.00
• Gasoline: $200.00
• Health Insurance: $178.00

Our Emergency fund is now at: $9,968.54... $2,259.40 Short... (We keep $1k in both our checking accounts as a buffer and that isn't included in this number...)

So were back in Savings Mode... Ideally because we are both working, i'd love to start working towards 6 months of base income set aside... which is a little shy of $35k... So we'll be working on a new budget soon.

Beyond all odds....

Our Emergency Fund
Despite our "off budget month" it looks like we managed to pull it off and come out unscathed. Despite everything that happened this month, in a few days when the transfers go through, our emergency fund will be sitting pretty at $11,000.00........

Yup, that's right. We have our emergency fund done for the time being. If we break down our expenses and cut out all extras our budget gets really simple...

• Mortgage $808.18
• HOA $262.50
• Gasoline/car $200
• Groceries & Food $200
• Insurance Premiums $143
• Utility Bills ( Phones, internet, electric) $230

Together that's $1,843.68 a month, times 6 months = $11,062.08... and that's with us keeping the internet package on our cell phones. We figure we could get by with $200 a month on food since we'd do more batch cooking and we wouldn't end up tossing our stuff or letting things get wasted or go bad. Not bad for two 25 year olds just starting out :) Its our goal to try and keep the balance at 11k, and maybe add an additional 1k every year starting next year.

Presents for the twins...
We have also had a few comments on what we did for presents for the twins... and here's what we managed.

• For the twin, my sister wouldn't give us an option that fit in our budget that didn't involve alcohol. She either wanted us to spend a lot of money at EXPRESS for a really nice button up shirt, or stick $50 on a gift card to Game Stop... (because anything less meant he wouldn't be able to use the gift card to actually get anything from the store.) So, since we were running out of time, we just went to Costco and picked up a case of beer for him and stuck a bow on it. Not our most shinning gift giving moment, but SCB was okay with it because it meant we solved the problem because he was not okay with putting that much money on a gift card (and neither was I). So we grabbed a 36 case box of beer and brought that... $23.48
• For my sister's fiance, we picked up a UCLA bowl he wanted from the $0.99 cent store so he would have something to unwrap and inside the card we wrote that we got him the Movie he wanted (The greatest game ever played) and the TV show he wanted (Season 2 of eastbound and out) off Amazon since we couldn't find them in the store (the movie has been out for a long time and the Season doesn't come out till August 2nd). The Amazon purchases ended up costing us $28.98, but we have an Offermatic offer for $10 off a purchase of $20 on Amazon because I liked Offermatic on facebook a while ago and we occasionally get good offers from that... so in a few weeks that purchase will end up only costing is $18.98

Considering my sister wanted us to spend $50 a pop on them, I think we did really good with the little notice we had to plan for them... My mom actually went to bat for us and told my sister to give us options that were actually in our price range...

It was also nice that SCB and I got to work together to figure out how we want to handle gift giving as a married couple since his family normally doesn't spend much at all on each other when it comes to holidays and gift giving and my family tries to buy one another's love with gifts...  So it looks like we will keep the $50 budget for my mom and sister (and immediate family members), and keep other relatives to the $30 or so range. With this in mind, we should be able to better outline our holiday gift giving. In case you didn't know, Christmas is about 5 months away....

And speaking of Offermatic, we also cashed in some points we earned through the site to get a $25 gift card to Target for free. We are going to use it to stock up on either household cleaning supplies that I hate to buy, or we will try and keep it for holiday shopping.  

Emergency fund surpasses $11,000!!!!!!!

Bofa $1200
ING: $1288.33
CD: $200.00
EF: $7,731.85
Sallie Mae Cash: $200.11
Sallie Mae CD: $200.14

Money pending transfer to Sallie Mae: $200.00

$11,020.43 before interest for the month!!

Thank you no spend month!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Emeregncy Fund Update

Sallie Mae Savings $200.11
Sallie Mae CD's $200.14
BOFA Checking $1,200.00
ING Checking $1,000.00
ING Emergency Fund $7,931.72
EF CD $200.00



Total: $10,731.97



Wealth Builder $92.09
Bonds $456.16

Plus I should have a few more dollars to toss in once the month is done and everything clears all the pending payments

Someone got her tile refund

and it was me. My Emergency Fund is in the over 10 grand!!!!!!!!

**** Gushes *****

Sallie Mae Savings $200.11
Sallie Mae CD's $200.14
BOFA Checking $1,200.00
ING Checking $1,000.00
ING Emergency Fund $7,803.72 (added $1352.07- Tile refund and the Puppy $$)
ING CD $200.00


$10,603.97
-----------------
Wealth Builder $92.02
Bonds $456.16