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Emergency Fund Update and Musings

March 12th, 2016 at 09:06 pm

$16,322.85 Starting Balance
+__,221.67 Deposit Added
$16,544.52 New Balance

I have passed the half-way point on my second mini-goal of 2016, which is to get the EF from $16K to $17K. $455.48 to go. I was hoping to have met that by the end of April, but with DH's paycut going into effect at the end of the month, I'm not sure I will. It might be the end of May.

One of the things I am debating is whether or not I should keep saving for the down payment or if I should just start shoveling everything into the Emergency Fund and if the contract is won at the end of June, then just transferring the money to the Down Payment Fund then.

It all goes into the same bank account. I know it is just a question of where to put it on the spread sheet, but I have told myself I will not touch the money in the DPF until we are ready to buy a house, unless it comes down to needing it to live on. I guess it is a mental thing.

Well, and then there is the mental thing of only touching the EF if there is an Emergency and not really even wanting to do it then. So if all goes well I still may have a psychological problem transferring the money to the DPF from the EF. I don't even know what that is. Maybe a little of my OCD coming through?

Maybe I need to set up a short term holding tank, from which I can easily move stuff later. I shouldn't have to play these kinds of mind games with myself to funnel money to the proper location. Anyone else go through these things or am I just sort of on my own there? I know it is rooted in the financial insecurity we had in the past, but I really thought I would have gotten over it by now having been out of consumer debt for almost a year.

3 Responses to “Emergency Fund Update and Musings”

  1. rob62521 Says:

    I understand your wanting to have different accounts for different things. Since our interest rates are so darn low, I don't seen any problem with having different accounts. It isn't like you are going to have a major loss of interest by not having it all in one account. We have a mixture of accounts. We have the normal checking, then we have two different Money Market accounts, one at a bank and one at a credit union. At the credit union we have a Christmas club, a vacation club, and a regular savings account that we put money in it for home improvements. Right now we plan to replace our roof so we have the money set aside. It helps us by seeing the accounts individually and we can tell how we are doing. It also is a mind thing with doesn't hurt as badly to take out a big amount for a purchase than it would if it were in one big account since we had saved for a specific purpose. Silly, I know. But our financial adviser applauded us since we had savings goals and knew what we were saving for.

  2. creditcardfree Says:

    Yes, I deal with this a bit. In the end I just know what portion in our account is for the next down payment. I'm not currently adding to it.

    The short term holding might give you the most security and control.

    If it were me, I would keep doing the same thing. Adding to your DPF. Make note of the balance of the account as of now, and then if in June you see the contract coming to an end, consider if you would like to transfer the recent deposits to the DPF back to the EF.

    I think staying positive towards your goal is important until you know there is an actual storm on the horizon. I would probably tell someone else with little to no EF differently, but you are in a good position, LR.

  3. FrugalTexan75 Says:

    I like CCFs approach. That way you still are making forward progress on your DP goal, but you also know that that money *could* be reallocated if needed.

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