I have decided that a target dollar amount for my emergency fund wasn't enough. For most people it is ok but I like to be a little more detailed about it for my own life. I have come up with a list of sub-funds that the big number covers. I am assuring myself that multiple categories, in order of importance, are covered in the even of a financial emergency.
This idea spawned from the fact that I have multiple savings accounts. I originally got the accounts because of interest rate offers and other various reasons. I now have am using this to my advantage to repurpose them for specific parts of my emergency fund. The numbers happen to fall into place where I feel they needed to be.
Here is a break down of my target $10,000 emergency fund (in order of importance):
- $5,000: Job loss/pay the bills general fund
- $500: Medical co-pay and misc fund
- $500: Car repairs
- $1000: House Repairs
- $3,000: additional job loss fund for more extended unemployment and misc. emergencies
Another "tiny" emergency fund that is built into my monthly budget. I have a $100 misc category that I will use up first before tapping into any fund. This keeps me from having to do $5-20 transfers for little stuff that would throw my budget off. It just makes my life easier to manage financially! I do track it and roll it over or transfer to savings if there is some left.
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