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2016 Goals for the Emergency Fund

April 9th, 2016 at 10:11 am

I ran the numbers and in order for me to hit my goal of $20,000 in the Emergency Fund by the end of 2016 I need to come up with $1672.68 total beyond the $150 per month that I deposit normally now. That is $209.08 a month extra I'd need to be saving, or a total of $359.08 a month.

With the interest I earn on my savings accounts of $35 or so a month, I can bring the $209.08 down to $174.08 extra each month to scrape up. I'm not sure if that is going to be doable. It would have been before the pay cut, but I don't know otherwise.

If I drop my goal for the year down to $19,000 I would only have to find an additional $84.08 a month, minus the $35 for interest each month, so $49.08. I usually manage to scrape an extra $50 or so together each month between farm sales, the coin jar, and any non-allocated money left at the end of each pay period. So I know I can actually hit the $19,000 goal as long as nothing unforeseen comes up.

I might be able to hit the $20K goal if I am able to sell some rabbits or rabbit meat often enough, but not just from general scrimping and saving.

I think I need to be realistic in having $19K be my goal for 2016, with $20K being more of a stretch goal that I can aim for, but not get discouraged if I can't actually hit that. If DH gets any over time, assuming his job stays stable, we can hit $20K, because then I can grab a $1000 chunk from the OT paycheck for the EF. But that is not something we can depend on.

I know he has one day of overtime coming up, but that is not anything like a full week of it. Still, that one day might help sway the balance towards hitting $20K. Or at least $19,500. I really, really, really want that $20K.

$20K means that we would have 5 months of tight living expenses or 6 months of extremely bare bones living expenses in the bank and from there it would mean we would probably have 6 months of tight living expenses by mid-2017 since part of the tax return would go into it. At which point I could head towards $30K, which would mean 6 months of comfortable living expenses or 7.5 months of tight living expenses or 10 months of bare bones living expenses.

Once I get to $24K I feel like I can start laddering six month CD's and start earning a little bit more interest than I am earning now.

All of that to say, $19K is my reasonable goal and $20K is my hopeful goal for this year.

7 Responses to “2016 Goals for the Emergency Fund”

  1. snafu Says:

    LR, I'm sad. What is driving all this scrimping and scrabble living? How many hours per day are you enjoying, visiting friends, watching a film, going with DKs to a social event? Date with DH? Since the Disney visit, what holidays? Celebrations?

  2. snafu Says:

    Why not buy some laddered CDs in $ 1K - 5K increments now if the rates are higher than savings? What's magic about $ 24K?

  3. LuckyRobin Says:

    Snafu--What is driving it that we want to scrape together enough cash to have a decent EF if DH loses his job in an industry that is struggling. What is driving it is that we want to move out of where we are living now and back into a home that is completely our own, without having to get permission to do things to the land or limits on what farm animals we can have. We want to get back out of the city and into the country and away from all the traffic and noise. We never want to be in credit card debt again. It took us too many years to dig out of that and we are not going back there.

    $24K can be divided into 6 segments of $4000 each. That is a month's expenses. That is what I want in each CD. We'll need to be able to access $4K each month if there is a job loss.

    I watch movies or shows online all the time (we still have internet and Netflix), with DH when he's home and I read a lot (for free from the library). I don't enjoy going out to movies because the chairs are not comfortable for my bad knee or my back and I don't like crowds. I also don't like social events. And neither does DH. We are introverts. Unless they are family things, like my niece's baby shower or my MIL's 70th birthday bash. We are well past the stage in our lives where we go to things just to go to things, just to be seen and meet new (and generally irritating) people. I have a low BS meter and social events tend to be full of such things. If it isn't meaningful, it's a waste of time.

    I am outside with the animals and the garden a couple hours a day, which I love. Gardening and animal husbandry and knitting are my hobbies. I also spend 2 hours a day on writing fiction, about an hour a day working on my youtube channel and 2 blogs, also big hobbies. I am part of a farming community where we barter, buy and sell, and generally help each other out with things like building greenhouses or barn raisings or milking someone's cow so they can go on vacation.

    We aren't going on vacations right now because we have farm animals. Someone has to be home to take care of them morning and night. We are saving for a big trip to Hawaii for 2020 or 2021 and to pay someone to farm sit while we go. Road trips are not my thing, again, because they are too hard on my body. We will go to an occasional high school play or musical as they are much cheaper than fancy ones in Seattle and just as enjoyable, even more so when we know the kids.

    Most of my friends don't live here, but I talk with them online regularly, and see the one who does live here usually once per week. I don't need to be around a bunch of people. In fact, I prefer not to be. I like being with my family. DH and I go on dates on occasion, but we spend a lot of time together doing things on the farm. Building things, butchering, canning, playing board games. We also hang out in the rabbit shed at night when he's home so we can talk without the kids around and play with the bunnies. Those are the kinds of things we care about. We don't have to spend masses of money. Since I can't hike anymore, we have had to adapt to the circumstances.

    We still have our gym membership, so I see the ladies there at water aerobics and that is enough socializing for this introvert.

    I enjoy the challenge of saving money, of finding ways to do it, without sacrificing our quality of life. Although I'd prefer to do it without the impetus of a pay cut and possible job loss. I do like to figure out how to save more. So we don't go out to eat much, but we have high quality organic food, some of which I raise, some of which I buy. We have one luxury mini-van instead of having two vehicles. We prioritize the farm and the family above trips and events. We all have good quality clothing as opposed to massive amounts of poor quality clothing.

    It is a lifestyle paradigm that is quite different from yours, that is all.

  4. DW Says:

    LR, challenge yourself, go for the 20k. With the contract uncertainty, it would be a wise decision. Plus the challenge is always good. Also it's possible to get some additional monies from the storage unit and maybe the sale of some of the items in storage. I noticed you didn't include that in your calcs.

  5. LuckyRobin Says:

    DW--No, I didn't include that because it is not a given. It's what I consider unexpected income, not something I can rely upon. I will still try for the $20K, but I won't beat myself up if I don't get there.

  6. debtfreeme Says:

    I hope you are able to clean out the first storage area to close out the second. What a boost it would be to your monthly saving goal - an you could hit 20k.

    I so appreciate the planning that you do - makes me feel better that I do something similar.

    I hope you are able to check a few things online before you sell them? Might make more on ebay of they are sets of collectible items?

    Good luck!

  7. FrugalTexan75 Says:

    Your social desires sound quite a bit like Mr FTs - he'd be happy as a clam to be in his own space 24/7 and not have to deal with anything but animals (and maybe one or two special people. Big Grin ) I'm not quite like that ... so kind of push him out a little bit .. Smile

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