Emergency Fund

[betty]

no sis.

[showermist]

will be OK to put your emergency fund sa time deposit? if yes, anong terms lang para easily pwede mawithdraw?

kung san ka kumportableng ilagay ang pera mo. it doesn't matter if it's in a TD or money market. if it's in TD, you can actually withdraw anytime pero you will be denied of the earnings for that term or what-not. check your bank.

[luranski]

Emergency savings fund for others but for me, I would rather call it safety fund because it is more positive and considering the law of attraction! When you say Emergency, you may attract emergency scenarios, so I would rather call it as a safety saving fund. Starting a safety fund is one of the fundamental building blocks in building a personal finance foundation for yourself. Many personal finance gurus agree that this is one of the first things you should do, before investing, buying cars, and houses or simply say, before you fund other expenditure. It also ranks ahead of paying off high interest debt. It’s not a flashy topic, but smart personal finance has little to do with flash. This post will cover why you need safety savings, how much you need, and where to put it.

[ikaela]

^LOL, thats actually a nice way of calling an emergency fund. I also agree that it's one of the first things you should have when building a financial portfolio. Get it even before getting insurance.

[FayeP]

Hi Sisses,

I would like to start sana an emergency fund nga kasi nabasa ko sa cosmo mag na we need to have at least 6 months salary in a separate account for emergencies, but every time po kasi na mag start ako magtabi may biglang need bayaran/pagkagastusan so nagagamit ko din agad un natatabi ko...

ang ginagawa ko ngaun, may 3 akong coinbanks na nilalagyan ko ng pera, un isa, puro P5 and P10 coins lang, un isa, P20 at P50 bills nakalagay, un 3rd, puro P100. 

tinatry ko talaga hulugan araw araw at so far lampas kalahati na silang lahat (bamboo coinbanks kasi to, about 1 and a half feet tall each), kaya kahit pano feeing ko may ipon ako. 

[kaycee0307]

gusto ko na din try to simula nung nabasa ko, iba pala emergency fund sa non emergency fund hehe..
ilagay ko sa saveup ko kahit unti unti

[pink`era]

From what i've read sa isang book, before anything else kelangan mabuo mo muna ang emergency fund mo. This is very important daw before putting money in insurance plans, stocks, etc. Once maabot mo na ang 6 months worth ng emergency fund mo, wag na galawin yun and use your money na for investing.

[betty]

need muna unahin ang emergency before life insurance?
eh hindi ba mas parang safe ang life insurance muna before emergency fund? as we all know hindi natin alam kelan tayo mamamatay
 baka hindi pa nabubuo ang emergency fund tigbak na tayo.

[swit_squiggle]

hahah.kakatawa ka sis betty.  anyway kahit ano man ang reason ng bawat isa equally important naman ang emergency fund tsaka health and life insurances. lagyan lahat ng kahit kaunting coverage at lagyan din naman ang emergency fund. kasi hindi mo naman maprepredict talaga kung saan ang mauuna.

[sereiuqse]

Emergency fund is also known as rainy days fund. It is needed for unforeseen events that may occur. The best example for this is the ONDOY. The primary goal is when this time comes, you will not choose to loan for the emergency needed thereby eliminating high interest that could crippled your cash flow.

3-6 months is good. I have an emergency fund last Jan. 50k then kiddo got sick, minus 30k. So 20k na lang, buti malapit na ang 13th month, malalagyan ulit.

The best thing to do when you already use your EF is to accumulate again slowly.
Remeber: When it Rains, it pours!

[Shery]

hay mag iipon pala muna ako ng ang EF ko bago mag business ulit.. thanks po dito.. ♥

[bb]

need muna unahin ang emergency before life insurance?
eh hindi ba mas parang safe ang life insurance muna before emergency fund? as we all know hindi natin alam kelan tayo mamamatay
 baka hindi pa nabubuo ang emergency fund tigbak na tayo.

sis yung emergency fund kasi pwede mo magamit halimbawa nagkasakit ang magulang o anak o asawa mo. pwede din gaya nga ng example ni sereiuqse
during calamities. life insurance magagamit mo lang yun depende sa policy coverage (hospitalization mo, na-accident ka... etc). emergency fund pwede mo gamitin ang pera mo kung saan mo kailangan, walang limit. just my opinion.

[letters_to_cleo]

I placed my emergency fund  sa passbook-only, high interest account sa  bank
branch sa province haha, the bank itself is stable naman but I chose to place it in the
provincial branch  para talagang di ko magalaw. Dati I used to mix my business money with my
personal account, but I found I was losing my discipline in money kaya i-separated talaga
my emergency fund with my biz money.

To my thinking, the emergency fund is something I will never ever use unless big s*** happens.

Ang opinion ko, emergency fund is separate from my normal savings account na usually iniipon ko then depende sa mood, use
it for travel, invest or just save it  na lang.

I subscribe to the belief na dapat ikalat yung money -- a little sa emergency fund, a small insurance,
some for the splurges (in my case gusto ko magtravel ng bongga kahit once a year lang),
then some for investment/business. Kahit pakonti-konti okay lang basta nakaspread ang money.

But then sa akin lang ito ha, this is just how I handle my finances.

[betty]

bb, yes multi purpose ang emergency fund pero mas magiging kampante ka kase lalu na if you have children, if you have life insurance.
di din natin alam alin mauuna so mas maige if we have both. kase sa totoo lang with our daily living expenses ang hirap talaga mag ipon at bunuin yung 6 months worth of salary.
kaya sa mga single, ipon ipon lang kayo

[babynadine]

thanks to this thread.. reading made me learned a lot.. konti nalang pla malapit ko na mabuo yang emergency funds n yan

[angellove]

nabuo ko na rin sa wakas yung EF ko (3 months worth of salary lang since Im single pa naman).  Nasa savings account ko lang sya. 

[betty]

good for you sis!

[sachism]

I placed ours sa SdA kasi mas malaki ang interest

[blooming]

Emergency/Safety fund, para sakin naman, ang purpose nya is to stay afloat in case your income was on hold for some reason. Kung bigla kang nawalan ng work, then you use that fund.

I won't use this fund for hospitalization or any calamities.  Because by theory, people should have life and health insurance, property insurance.  Siguro temporarily, emergency fund muna, but then they should get reimbursed by the insurance.

Kung alin ang kelangan mauna - insurance or emergency fund?  Hmmmm....  I don't know. Pareho silang kelangan eh.  Pero for some reason, mas matimbang sakin ang insurance - depending on your situation siguro.  Kasi if secure ka naman sa job mo, you will need insurance more. Pero kung alam mong tagilid ang company mo at hindi ka pa nakakahanap ng work, baka kelangan mauna ang emergency fund.

Ang since emergency funds are not meant to be touched, mainam nga naka invest sya sa liquid investment like timedeps (not stocks or property).

Hi Sisses,

I would like to start sana an emergency fund nga kasi nabasa ko sa cosmo mag na we need to have at least 6 months salary in a separate account for emergencies, but every time po kasi na mag start ako magtabi may biglang need bayaran/pagkagastusan so nagagamit ko din agad un natatabi ko...

sis, kasi depende yan sa definition natin ng emergency fund.  if for me, it is for my safety net - to be able to cover for my expenses for the next 6 months if I am out of job, hinding hindi ko nga sya dapat galawin kahit pa ano pa yun kasi ang purpose nya eh kung mawalan ako ng work.

pero kung ang definition natin ng emergency fund na anything na biglaan na hindi nakabudget, malamang ganyan nga ang kakalabasan, hindi tayo matatapos makaipon ng 6 months, and most often than not, lagi naman merong events na nangyayari (maganda man o hindi) na hindi budgeted.

[blooming]

^Tama, those are living expenses. Everything you spend on to live day-to-day, including electricity, water, internet/cable, food, transportation, laundry, entertainment, dog food if you have a dog, etc.

Insurance is different from an emergency fund; insurance is for when the ULTIMATE emergency happens (accident, death, disability). An insurance company won't cover you for things like a busted water pipe, a leaky roof, a sudden but not serious illness or even when you lose your job -- these are the kind of things that an emergency fund is for.

busted water pipe and a leaky roof should be budgeted as "maintenance" for the house.  if you are renting, dapat may ari ang may sagot nyan. if you own a house, you should be budgeting for the annual maintenance of your house. therefore, in the end, hindi parin dapat magalaw ang emergency fund.

Emergency fund is also known as rainy days fund. It is needed for unforeseen events that may occur. The best example for this is the ONDOY. The primary goal is when this time comes, you will not choose to loan for the emergency needed thereby eliminating high interest that could crippled your cash flow.

IMHO, I partly agree and not agree that you use emergency fund for calamities such as Ondoy. As I have posted, your properties are supposed to be insured.  If you are renting, you are supposed to insure kahit yung laman lang ng house, in case of fire.

But on the other hand, magagamit mo din ang EF for short-term purposes.  Since you have to stay in a hotel/motel for a wk in case mabaha house nyo, then, the emergency fund could cover for that. Or sa paglinis ng bahay, pagreplenish ng mga nasirang furniture that is not recoverable by insurance. Maybe yet, yung nakabudget for bakasyon/outing for the yr or any other extra curricular activities would need to be put on hold muna at ilaan sila for these unfortunate events, in the short term. Tapos once things stabilize, ireplenish na ulit ang EF tapos unti unti mag ipon for other things you "need" to replace/buy.