Freezing in NH

I’ve been thinking about the amount to set aside for an emergency fund lately.  I do have cash set aside, but my house needs some repairs and I need to figure out if I have the money for everything or not.  There are a couple of factors involved in the calculation, but it basically comes down to “how long does the fund need to last” and “how much do I need each month”.  Then some simple math determines what the fund ought to be.  Saving up that much is another topic entirely.

I’m single, and while I’m confident in my ability to find another job, I’m not confident in my ability to find another job HERE.  Since I own a house, that could be trouble.  Actually I could find a job, just not a job that pays all the bills.  I could be employed in retail just above minumum wage in less than a week.  

It’s hard to immediately cut back (if you had a sudden job loss) because everything has a final bill.  Drop cable and you get one more bill.  Drop the land line and, yes, one more bill.  And I put everything on a rewards card and pay it the next month, so that bill too will come after the day I decide to cut back.  So when you plan, you probably need to include one month at your current spending levels before assuming you’d cut back. 

I’ve decided on an amount that works for me.  My current e-fund amount will cover 3 months of living like I do now, plus three more months of bare-bones living.  I’d probably cut back to bare bones after 1 month, so it might stretch to 7 months total.  I do have friends and family I could lean on in a pinch.  Specifically several folks a few hours away near lots of jobs.  I could crash on various couches during the week if I ended up getting a job down there while I was waiting to sell my house.  If I didn’t have that fallback plan, I might want a few more months of bare-bones living in that fund.

This entry was posted on Wednesday, February 27th, 2008 at 11:15 am and is filed under saving. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.