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Reimbursing emergency funds
Posted: Wed May 17, 2023 1:57 pm
by banders
I think anyone with internet access knows to keep emergency funds of a few million yen just in case. But I haven't seen any conversation about what to do after you use it. If you saved the emergency fund before you started investing, how do you top it up after you use it? The only way seems to be to stop investing. My fund was saved from pensions long ago that I cashed in so I haven't experienced that. Has anyone?
Re: Reimbursing emergency funds
Posted: Wed May 17, 2023 10:07 pm
by Tony
banders wrote: ↑Wed May 17, 2023 1:57 pm
I think anyone with internet access knows to keep emergency funds of a few million yen just in case. But I haven't seen any conversation about what to do after you use it. If you saved the emergency fund before you started investing, how do you top it up after you use it? The only way seems to be to stop investing. My fund was saved from pensions long ago that I cashed in so I haven't experienced that. Has anyone?
Reduce spending and gradually build the fund up again.
Re: Reimbursing emergency funds
Posted: Thu May 18, 2023 1:04 am
by sutebayashi
Fortunately have never had an emergency, but each month I am not investing every last yen of income, so that would eventually build up to an emergency fund level again.
Then once or twice a year, I do an annual rebalancing exercise and invest any excessive savings then, but retain an emergency level of cash.
Stopping investing for a few months wouldn’t be the end of the world if you had to do that, either.
Re: Reimbursing emergency funds
Posted: Thu May 18, 2023 4:41 am
by runmanTX
I agree with the above comments.
You could pause investing and build the EF back up or continue investing and build it back by pulling cash from another place. It kind of depends on how much you need to build back, I reckon. I've never had an emergency and had to use mine yet (knock on wood) but often "borrow" money from EF to pay other big payments. But I try to immediately replace it the following month.