Most personal finance experts recommend having an emergency fund. Yet, 47% of Americans don’t have enough to cover a $400 emergency. This is a problem.
The advice on emergency funds is diverse. Everyone’s in a different place, financially and otherwise, so what works for one person won’t work for another. Any way you slice it, it’s important to have a plan for when life throws those unexpected curve balls (and it will).
So, should you have an emergency fund? If so, how much should you have in it? And where should you keep it?
Rather than reinvent the wheel and write my own article on this important topic, I put together a comprehensive resource guide chock full of knowledge from the personal finance community.
You’re sure to find one article (or two or ten) that will fit your circumstances and help you decide what type of emergency plan is best for you.
All About Emergency Funds
Why You Need an Emergency Fund
Laura from Savvy Family Finance gives us a great example of why you need an emergency fund, where you should keep the money and how much to have.
Where Should I Hold My Emergency Fund
Slow Dad from Cantankerous.Life answers the common question of where to keep the emergency fund and establishes what a “genuine” emergency really is.
Setting Up an Emergency Fund and Cash Reserve
Kathryn from Making Your Money Matter provides a thorough, comprehensive guide to starting an emergency fund, complete with examples and steps in “class” format.
Developing a Financial Emergency Plan
Apathy Ends encourages us to have a specific plan in place for financial emergencies. An emergency fund isn’t the only thing to think about – cutting expenses, stopping retirement savings, and selling your car are a few options.
The Time Our Emergency Fund – and Plan – Saved the Day
Think it can’t happen to you? In a guest post on My Family On A Budget, Liz shares her personal story about a serious family medical emergency. Having an emergency fund was crucial for getting her family through this stressful life event.
How Your Emergency Plan Can Save You
Not only did the emergency fund help Liz’s family through this tough time, but having an emergency plan was a necessity. On her site, Chief Mom Officer, she recommends going beyond the emergency fund to develop a plan for the unexpected.
The Importance of an Emergency Fund
Josh from Money Buffalo covers all the hows, whats and whys of an emergency fund. Do you wonder what you shouldn’t use the emergency fund for? He shows us some “Improper Uses of an Emergency Fund”.
Baby Step 3: Fully Funded Emergency Fund Update
Don’t miss the story of how Steve from My Family On A Budget was able to build his family’s emergency fund, even with a few bumps in the road.
The All-Important Emergency Savings
Jim from Route to Retire shares exactly how much they keep in an emergency fund and where they keep it.
Why You Need an Emergency Fund
Mustard Seed Money likes to think of the emergency fund as “cash as insurance against unexpected events”.
Emergency Fund: You’ve Got to Have One
Francesca of From Pennies to Pounds believes an emergency fund is a necessity. She suggests a more meaningful, exciting name to help motivate you, such as the “**** hits the fan fund’ or ‘don’t need to ask the in laws for help fund’!”
The Importance of an Emergency Fund
Brian from Debt Discipline says an emergency fund changed everything for his family. It got them through significant life events without adding financial stress to already stressful situations.
Everything You Need to Know About Emergency Funds
Michelle from Making Sense of Cents answers all the burning questions about emergency funds – for those times when “you need money fast”.
Is Your Emergency Fund Big Enough?
Gary from Super Saving Tips helps answer one of the most difficult questions: Exactly how much should you have in an emergency fund? Check out his tips on how to build savings too.
The Importance of an Emergency Fund in College
Do college students need an emergency fund? Stephonee from Poorer Than You thinks so – and she shares why.
Why Having Savings Can (and Will) Change Your Life
Having a nest egg can be completely life changing. Ricard from Escaping to Freedom tells us how it gave him the freedom to change his life in great ways.
13 Easy Ways to Save
If you think you can’t possibly save for an emergency fund, here are some suggestions that may change your mind. This one’s featured here on Centsibly Rich.
How to Quickly Build an Emergency Fund
Need an emergency fund and need it fast? Head on over to Young Adult Money to check out these tips on how to build it quickly.
Be Proud of Your Emergency Fund
Be proud of your emergency fund, no matter how much, or how little, you have saved! As J$ from Budgets Are Sexy says, “It may not be as much as you’d like, but you’re on it and you’re getting closer”.
5 Financial Moves for Millennials to Make Before 30
Here’s some great money advice for all of the 20 somethings. Head on over to The Frugal Farmer and do these 5 things. Your future self will thank you!
The Evolution of the Emergency Fund//From Kiddie Pool to Olympic Swimmer
Mrs. Need2Save explores how your emergency fund needs change, depending on life and financial circumstances. What phase are you in? Kiddie pool, doggie paddle, proficient swimmer or Olympian?
Rethinking Emergency Funds
Miss Bonnie MD shares guidelines and questions surrounding emergency funds. She also puts the personal in personal finance and shares her strategy.
Why Do You Need An Emergency Fund?
Katasha Kay from Broke Girl Rehab put together a great video on why you need an emergency fund and how to build it, complete with real life examples.
Back to Basics: Emergency Fund [$$$]
Claudia and Garrett from Two Cup House have crushed their debt, but have struggled to find the right emergency fund strategy. Check out their new system and how it’s working for them. Maybe it could work for you too.
Be (Financially) Prepared
Ty from Get Rich Quickish wants you to “get your crap together” and prepare for a financial emergency now. Because even if you’ve never had a financial emergency, you probably will.
Why You Need A Beginner Emergency Fund
Alaya at Hope and Cents shares why you need an emergency fund, how to build it quickly, and where to keep it (check out her unique strategy for where to keep it if you don’t have the discipline to not spend it).
Single Dad Living goes beyond the standard emergency fund to discuss why you should have a sinking fund and how to build one.
The Ultimate Emergency Fund
Akash Sky discusses the which, what and why of emergency funds, and takes a unique approach on where to keep it – an I-bond. What’s an I-bond, you say? Click on over for a great info-graphic that clearly explains it all.
Alternatives to the Standard Emergency Fund
Top 10 Reasons For Having an Emergency Fund – Debunked (Part 1)
Top 10 Reasons For Having an Emergency Fund – Debunked (Part 2)
A thought provoking 2 part series from Early Retirement Now debunks the theory that an emergency fund should be housed in a “safe” account, as the loss in investment returns is significant.
Is An Emergency Fund Necessary?
Big Law Investor makes the case that, for high income earners, traditional emergency fund advice doesn’t fit. He shares his recommendations, as well as where he keeps his emergency funds and why.
The Side Hustle Safety Net: Protect Yourself Against Job Loss When You Don’t Yet Have an Emergency Fund
If you don’t have enough in the emergency fund, a side hustle can be a valuable backup. When Lindsay from Notorious Debt lost her job, she didn’t have a fully funded e fund, so she stepped up her freelancing side hustle to successfully replace the lost income.
Investing Your Emergency Fund
Should you invest your emergency fund? Maybe! Grant from Millennial Money uses his own example to show how much growth he missed out on by not investing his emergency fund.
Rethinking Emergency Funds
Check out this related Millennial Money podcast, where Grant and Matt from Distilled Dollar discuss the factors to consider when deciding whether to have an emergency fund or invest (or both).
Emergency Funding Like a Pro: Ditching the $800,000 Emergency Fund
The Money Wizard eloquently describes the high cost of holding a large emergency fund and suggests alternatives to traditional savings.
Why HELOCs are Awesome
Jon from Be Net Worthy gives us the ins and outs of HELOCs and why they make a good emergency fund alternative.
Emergency Fund Alternatives
The Green Swan doesn’t follow conventional advice on emergency funds. In this post, he discusses the opportunity cost to keeping the money in a regular savings/checking account and details 4 alternatives in lieu of standard advice.
What do I do with my emergency fund? I used to have the standard 6 months cash in a savings account, but recently set up a HELOC as a backup plan. We have the flexibility to invest more money with the HELOC in place (right now, we’re planning to invest it in real estate).
What did you learn? Do you have an emergency fund? If so, where do you keep it?
Fellow bloggers – if you have a great emergency fund/emergency plan post and want it included, please let me know and I’ll be happy to add it!