My emergency fund now proudly stands at $1000! On the one hand, I’m really happy. On the other hand, I feel like it should be a lot higher by now. I had some large expenses that cut into my progress (vet visit, contacts, personal property tax – I think I forgot to update about that, but it turned out to be $150, not $33) and I moved $500 out of it to start a car maintenance fund. But hopefully it will be sharply on the rise from here.
I think $1000 is an important psychological milestone for people trying to improve their finances. Assuming you don’t get laid off, $1000 could cover quite a lot of unexpected expenses, like a bill you forgot about or a dead car battery or an emergency trip out of town. That being said, I would like to have significantly more in the bank in case of a bigger emergency. That’s why I think that my #1 financial goal for 2010 will be to build up my emergency reserves.
I’m also not exactly sure of what I think my goal should be for that fund. Right now, I’m thinking $6000 because that’s a little over 3 months of living expenses. I know that most financial experts recommend more than that these days, but my job situation is a little bit different because I’m now a tenured teacher. But in the PF community it looks like most of us aim for about $10,000. I’m going to keep my goal at $6000 for now, but I’d like some feedback. Is $6000 too little?
Other than that, I’m looking forward to a good weekend. My college roommate S is coming to visit today, and we’re going to a creperie and wine bar this afternoon. I’m also going to clean my apartment and work on my book and just relax. Enjoy the weekend everyone!
