RetireJapan

The standard advice is to build your emergency fund before doing other investing. It's good advice, but I thought examples of the kinds of emergencies that can happen would be even more persuasive.

Recently, I experienced my apartment flooding and suddenly becoming unliveable. Even though everything was covered by insurance, my emergency fund was very useful for getting a hotel, then a weekly mansion and now doing an unplanned move. At a very stressful time it was nice to be able to just throw some money at the problem and make things easier. Getting money out of insurance companies takes time too, so I've avoided having to use savings or credit cards to cover costs.

My emergency fund is 6 months of monthly expenses. I keep 1 month in cash with my passport and other important documents in case I lose access to bank accounts or have to flee due to natural disaster etc.

What have you used your emergency fund for? Any lessons we can draw from that?

My emergency fund is currently 10 months of expenses with a goal of eventually building it to at least 1 years worth (almost there). I haven't really had to tap into my EF yet (knock on wood) as I've been lucky. I'd say that just having it available is the best gift as it creates a huge peace of mind for me.

laurie wrote: ↑Thu Apr 06, 2023 1:39 am
My emergency fund is 6 months of monthly expenses. I keep 1 month in cash with my passport and other important documents in case I lose access to bank accounts or have to flee due to natural disaster etc.

Keeping some in cash is great advice.

I had to use some of mine to go to a funeral once. Like you said, at a stressful time, it was great to not have to worry too much about paying for the trip.

I don't really have an emergency fund per se any more. I do have a lot more cash now though -maybe around 8% of our net worth?

This is as a buffer as my income is much less predictable now that I am no longer formally employed.

We don't really have an emergency fund per se. However, we have saving boxes, which we pop 100 and 500 yens into. We find that works great.
The last emergency we had was when the car conked out. So we replaced it with a second-hand car. Our previous one was about 18 years old ish.
So we opened the boxes and added some extra money from our savings. So we just rinse and repeat. We buy a few more boxes and start filling them up.Whenever we find a 100 yen or 500 yen coin in our purse, we pop it in.

We dipped into out emergency fund when building our house when unforeseen expenses popped up. But otherwise it is for if I lose my job somehow and am without work for a little while. For other things like household maintenance and such I have a separate savings.