Thread on emergency funds: Most of us know what an emergency fund is - it& #39;s a fund (usually savings in a separate bank account) which pays for financial emergencies (unemployment, car repairs, medical costs, a leaking roof etc)

Emergency funds are when Murphy comes to visit.
1. In our story, we were privileged to have received a great retrenchment package which basically covered 14 - 18 months of our living expenses.

Imagine what would& #39;ve happened to us if we didn& #39;t receive this...
2. To put it into context, our emergency fund would have been depleted after just FOUR months.

My wife was unemployed for 9 months. Perhaps we would& #39;ve needed to take out a personal loan, move out of flat to reduce our rent, and have a diet of beans on toast.
3. There& #39;s lots of debate among financial coaches and planners about how large your emergency fund should be. General recommendation is between 3 - 6 months of living expenses.

Obviously it& #39;s a personal decision, but after going through a period of unemployment...
4. We have changed our viewpoint of the size of an emergency fund to be between 6 - 12 months of living expenses.

Some would say this is too conservative, but if you live and work in South Africa and with our current pandemonium of a pandemic, 6 -12 months is my suggestion.
5. General tips on emergency funds:
1. Build it as fast as reasonably possible.
2. Put it separate from your day-to-day bank account.
3. Relative quick access (financial emergencies are often urgent)
4. Consumer debt free (this will help you with point no 1)
6. My personal mistakes:
1. My own budgeting/management could& #39;ve been much better, making the funds last longer.
2. Less attention to own finances due to the "very large emergency fund"
7. Emergency funds are not sexy. But they& #39;re the goalkeeper of your finances. Without it, you& #39;ll lose all your games and be relegated yesterday.

A good goalkeeper can prevent losing and make winning easier.
8. Set up your financial house like a good football team - a strong spine:

1. Striker - A good income/Income streams for goals
2. Centre mid - A balanced budget that gives you options
3. Centre def - Low/No consumer debt
4. Goalkeeper - Emergency fund
9. Having a strong spine can win you the EPL. Remember that you are the manager of your financial squad and poor management can give you a Champions League spot, or be a relegation contestant.
10. Nothing I& #39;ve said here is "new information", but I hope you& #39;ve enjoyed the thread. Please feel free to comment your suggestions or feedback.
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