I’m interested in learning what other couples, with one spouse active duty, have as their Emergency Fund amount or goal.
Our’s is currently 40k in a HYSA. We will be PCSing in 1 year which always makes me feel like we need the cash in case we choose to buy another house or have some large expense, but otherwise- military employment is pretty secure so I’m trying to decide at what point do is it smarter to direct money into retirement/brokerage accounts instead. (We also max 1 401k, 1 Roth IRA, and contribute to 529s).
Thanks for insight!
Posted by daisymomm
4 Comments
An emergency fund is not for buying a house. That is an entirely separate fund.
An emergency fund is 3-6 months of expenses. That’s it. Most military members choose 3 months due to the security of the job, but you could always have a car blow up or not get paid if no budget. Rare, but depends on your ability to take risk.
Ours is minimum $10k, but we use the same a count for a revolving fund so the balance is usually higher. If we’re coming up on a PCS, I’ll let the balance grow as well.
We do have other accounts that I could get money out of within a month or two if we had a larger emergency and needed to float some on a credit card.
I don’t think we’ve ever had an actual emergency that was more than a couple of thousand. Most big expenses are PCS related and we’ve never had one of those that was unexpected.
If you own a house, $15-20k.
If you don’t, $8-10k.
You have enough money for any emergent repairs or to put a down payment on a replacement vehicle.
H – AD, W – civ.
We were holding 40k in a HYSA as our E fund with no real rhyme or reason other than blindly following the traditional financial advice of “6 months of all expenses”. Mil employment is pretty secure, thankfully, so we decided to approach it differently.
We sat down and factored a threat assessment. What is the worst case scenario and where would we pull funds from? We figured immediate family members deaths / traveling home / cost of hotels and rental car, house repairs, car repair to be our biggest “threats” and looked at costs associated to each. We decided a 10k-20k emergency fund is probably enough for us and adjusted our numbers accordingly.
That worked well and got us through some issues.
As we approach retirement our numbers shifted to align with FIRE, to 2 years living expenses in an HYSA, and all the rest properly invested for growth.