After three years of paying off over a $100k in debt, I finally have an emergency savings of $25,000. Recently diagnosed with cancer, I can't tell you the peace of mind I have because those funds are there. It's one less thing to worry about.
I just got my first job out of college (graduated debt free) and started my emergency fund. $1,500 in my check engine light came on. Something was wrong with my gas lines and it cost about $600. The emergency fund was amazing to have.
I had an emergency fund of $3K. My minivan with 196K miles broke down, and it wasn't worth investing anymore. Buying a used replacement minivan wasn't easy, but I did it, without a credit card or financing. Praise God, I endured the emergency. I am confident the fund will be built back up again.
198k that is a lot of mileage so wasn't that something you saw coming up? I always factor maintenance and repairs in my budget. My emergency fund is for the unimaginable like a pandemic.
I see that you tried.....so in the end, I hope that you have been successful, and please be Blessed for your effort! Financial issues are extremely tough!
Cars should be taken around the barn and shot at 7 years. Get rid of them and sell them off. They will probably still work beyond that point, but the maintenance costs will be higher than the depreciation. A lot of people will say "you could get lucky", but the reality is that all cars needs maintenance and all maintenance costs. (Via sweat equity or paying a mechanic.)
My life is about to change because of Dave Ramsey’s advice. I was looking for something completely different on UA-cam when I found your video. I’m currently working on baby step #2 .God is good.
Thanks Dave. I saved 1.5 years of emergency funds because of you and riding out this storm. My dumb friends didn't listen and now they are in deep doodle because of the current situation.
My emergency fund, which used to be my life savings and my retirement savings, ballooned to $200k over the past decade. I know now to start allocating some of that money into a Roth IRA.
Today, 12/26/20, we hit our FFEF!!! 25k in the bank! My husband said, 'now what?' I said, basically, we start our savings! That 25k is a wall behind our back, and we need to pretend it doesn't even exist. It took 27 months! Good grief.
I listen to Dave regularly, although I never had loan in my life I still find is so helpful to stay motivated and save money. I mean...I’m doing baby steps as well. I was just able to skip Baby Step 2! Debt free screams are the best! ❤️ Thank you Dave, for all of the people you’ve helped in your life!
I am 33 years old and make $48,000/year. I started Dave Ramsey’s program 2 years ago and in that time, I paid off $18,000 in debt which was a combination of student loans and credit cards. I am almost done with baby step 3. I currently have $8,500 and should have a fully funded emergency fund at the end of next month. Feels like forever but like Dave said, the $10,000 fully funded emergency fund takes forever just like a foundation of a house. I wish I would’ve done these steps at 33. But I am hoping to say when I’m 43 that I was glad I did these steps at 33!
Nice2347 Because businesses down size and maybe her store didn’t make enough money to pay here. If she was fired it was her fault. So don’t let people say “I got laid off” instead of them actually being fired. This woman above probably was subject to actually being laid off from a telephone company that is probably losing much of their old success. Aka not her fault.
I really liked this explanation. I have an emergency fund and I was getting bummed about the low amount of interest. I needed to be reminded it was an insurance policy against emergencies.
Dave, thank you for being the voice in my head when I’m about to do something stupid with my finances- Since watching you in February, I have saved up USD1,000 (Php 50,000) in my savings account and it has given me confidence that i really can do this!!!! Love from the Philippines!
You must view your cash emergency fund like an insurance policy, and once you have it guard it carefully. It is NOT a piggy bank. You should not dip into it for incidental expenses. Use it only in the event of a true emergency, and hope that an emergency never comes. Remember, once that money is spent the time it takes to replace it is always much longer than anticipated.
Sad i won't make my emergency fund goal for 2020 because i have to go into it. Rarely have i had to if ever. When Dave says it's not if but when an emergency happen. It's definitely true. I came home from work to see water spewing out of my toilet, had been going all day. To the point water was coming from underneath brick outside. Literally all carpet had to be taken up. Im hoping this won't put a huge dent in it but i am prepared for 1000$ for deductible. I have about 6 month worth put back. I'm going to be ok. This maybe a good time to upgrade flooring on the bright side.
Oh my gosh...I listened to you every night on my way home from work and I just saw this video. Nothing at all what I thought you looked like...lol. I had a vision of you tall and thin...in a suit. I'm so glad I found this to put a face to the voice. Love it!!!!
I agree with someone else who commented. It would be cool to do an emergency fund theme hour like they did the millionaire theme hour. Or things people budgeted for and saved for besides cars or weddings
Perhaps the most valuable lesson my Grandmother taught me was to have some money put aside for a rainy day, well that day came 2 years ago when my transmission died in my car but luckily I had close to 4000 bucks tucked away from working overtime and my tax refund and was able to buy another car now that it's paid off I keep an emergency fund strictly for car repairs
We get it. We have truly "gotten it" for almost ten years now. Emergency fund, baby steps, cash envelope system, investing, being debt free, living like nobody else. We get it and are doing it thankfully. So grateful to you DR.
what sucks is I gotta keep around $20k in my emergency fund in case my company closes its doors and it takes me 6 months to a year to find another job... Civil Engineering was not the career I thought it was going to be
It sounds like when I worked in a hospital Security Department and we were one of the few non revenue generating departments But it was necessary for the health system to spend money to provide security to protect the revenue generating interests they had.
Hey, Dave. Maybe you should go into what an emergency fund can be used on. For example, someone needs new tires because they put 60k miles on their car tires with 2/32 tread left. They KNEW this was coming. This shouldn't be taken out of an emergency fund, right? As opposed to relatively new tires getting blown out on giant nails on a street. I think you touched on this before but it would be nice to dedicate a segment towards it.
The key to remember is that an EF is for anything "unexpected". Anything. Regardless of whether you have a sinking fund for it. RE: Your scenario: Regardless of knowing and saving for replacement tires if something unexpected happened before you saved enough - like the tires blew out or an accident - You would still need the EF.
I keep a spreadsheet with all my totals and amounts. I have a column with my emergency fund and all the upcoming expenses that I can for see and when they're due. (Car tires, dental work etc.) I then try to spread out those purchases so as not to deplete the fund too much. It would be a lot of work to make each one a separate fund. In a perfect world, my emergency fund minus upcoming liabilities would be equal to 6 months of expenses.
Hopefully something as cheap as tires would be cash flow, if not buy a cheaper car. This is another disadvantage to 4WD/AWD because if you're 1/2 way through a tire and it blows you can't just buy 1 tire.
Well if you need 4 tires it isn't so cheap anymore. I need 4 tires to pass inspection. Buying a different car doesn't make sense for me. I can pay for the tires with cash flow, but i still like to track such things. There is always limited cash flow.
Also I think its a good idea to have "Get Me Home Fund' of ~$200 hidden in cash in your car so you dont get stuck somewhere if you wallet / phone gets lost or stolen and you cant buy gas or food. I was at Wawa and a guy was asking for $$ because he said his credit card did not work and his phone was lost and he didnt have any cash to buy gas.
Car AC just went out (I live in the Midwest so driving without it is suicide) ...repairs cost $1.1k....putting this on my emergency fund.....if you're reading this...get your 1k fund now
It's not an investment but I was concerned about limiting the depreciation in value due to inflation. Thinking in terms of insurance provides some clarity, thanks Dave!
I'm in the uk we don't have the same accounts and tax,and also don't have to pay for health care , but some of the steps can still be done here are health care is payed through our taxes
You will pay tax rate on your 401k regardless. It's the 10% penalty that's bad, open a Roth ira as well if you may need the money sooner that retirement age. In a perfect world don't touch any retirement.
Pat the thinking is you will be in a much lower tax bracket once you retire and no longer earn a paycheck from a job when you’re collecting from your 401k.
Hi Dave, I'm 62 years old and on disability retirement. Afraid I smelled the coffee relatively late in life; I squandered away too much time and money. What's done is done, no sense wringing my hands about it. I'd like to travel in another 10 years and hope there's still time for me to make some money in investing (?). I'm at a loss on which direction to pursue. I own my home free and clear, have no high interest debt and have a 15K emergency fund. My biggest expenses these days are property taxes and insurance. I'm currently saving $1,500 to 2K per month. What's the best direction for me to proceed that's relatively safe and will provide the best returns?
I have a fund of half of my savings sdt into a bond fund invested in CA bonds which means all income is not state or fed taxable(cause its bonds and ca cant take it cause its CA) my ELP told me about this. The funds are instantly available via ATM card or check. historical and current is around 5% ROI. I figure even if it only gets me 1%-its 0.99% more than my bank. BTW im self employed and the money in this is half of every check as a hedge against annual taxes and expenses. this is my emergency/tax fund and cant not be otherwise touched. I require myself to live off of half of every check received.
Thank you for the clarification Dave! I just recently found your show and I’m almost finished with Baby Step 1. I was wondering if it’s better to keep the emergency fund in my savings account, all in cash, or half and half?
Dave recommends a bank account with check writing privileges. I use an online savings account that pays about 1.3%. It does take several days to transfer the money so for that to work you gotta have enough cash in your regular account to cover sudden expenses like a tow truck. I keep a certain amount in each account as a minimum balance. I never spend it but it's there in case of some automatic payment I forgot about, or any other small mistakes. I'm also self employed, so sometimes I get paid late and need cash on hand to wait for checks to arrive. You may want to keep $1,000 of the EF in checking and put the rest elsewhere. (adjust numbers per your expenses)
In one of his books, he talks about a client who framed it, wrote "break in case of emergency" on it, and hung it in the back of her closet. Some people just keep it in their checking. If you know you would spend cash that's lying around, then don't keep it in cash. Put it in a bank account you can control yourself from. Hope you're not still on BS1 a year later. Good luck with your journey!
Sometimes it’s not or, sometimes it’s and. Your emergency fund can act as insurance and also earn a good rate of interest. You can put it in an online bank paying 2.07% interest. On $10,000 that is $17 per month. I’ll take it!
Right now I have about $9k in my emergency fund... if it wasn't for paying off the $6k I owed on my car this year, plus the $4600 in furnace repair, car repairs, and doctor bills, I'd have a lot more!
What % of Net take home pay should be emergency fund before it’s built in full? 50%? I have a challenging question. What advice do you give sales people whose cashflows fluctuate unpredictably from say $2,000/week to $10/week, with bills to cover monthly? And should one get the flu, you’re out all your income a week but bills don’t stop coming in. So there’s HUGE tendency to underscore the risks of income disruption when things are good.
Thank you sir for this incredible lesson. When you say $1000, should I translate it to my currency, for instance that will be roughly P10000 (Botswana money). Many thanks, looking forward to your response
Wow Dave! Have listened to many of your videos. First time, and enjoyed you talking about The importance of an emergency fund, so that you don't cash out a 401k! Of like you said, "Pennies on the Dollar", and aka early-withdrawal penalty! Thanks a bunch and look forward to more of this topic. Most of us poor folk will become millionaires off of 401k; just like you said of the majority average of low to middle class people become millionaires off of 401k's.
Absolutely true, Dave. It is nice though to keep up with inflation if you can. I am not saying treat the Emergency Fund like an investment, but I am saying find a Savings Account that gives 1% or more. They're out there.
Just a quick question, had my car break down on me and had to buy another one sadly enough draining my emergency fund. The question is: do I stop investing my 750 a month in my 401k and s&p etf's and put it toward building the emergency fund back up. Sell quite a few etf's to get back to my 7.5 k emergency fund?
Everyone in these video comment sections about their EFs being really high. The general internet: 3-6 months. I think us in the comment section are winning because we can weather the worst of storms, considering some stuff like....idk, medical emergencies (USA) can cost way more than your 3-6 months worth of expenses.
What a difference 2.5 years will make huh???Does everyone still have that 10K??? Better still is it in a MM fund?? And is it actually earning money or gathering dust?? I too am re-building my EF but its going into a 30-60 step CD Ladder.. and IF I have to tap it then so be it.. That is what its there for...I hang onto the CDs for better than twice the length of the Early Withdrawal Penalty so that I get at least half of the projected interest benefits, and am constantly looking for better offers..When that little (short term) CD matures it has already paid for the future EWP, because most EWPs are based upon as little as a few, to maybe a year of interest penalty, and since the CD is already matured and earned 4-6 times (short term) the interest of typical savings it gets put into long terms earning 20-25 times typical savings, and 4-5 times MM.. Eventually CDs aren't the answer because there are financial instruments that earn better.. but for the beginners, and builders, CDs are probably the best balance to earning option
my classmate asked me to go to a 3 day"spontaneous" trip to Paris, old me will be a lil jealous. But post Dave Ramsey me is calm as my $3K sits happily in my bank account.
I'm 37 currently making $10.00 an hour after losing my job in March. I have an emergency fund and I will have it up to 28k by the end of November. Just stock piling cash because I don't know what to expect leading into January. I took this job through a temp service because I was desperate for income. I need to find a way to make my money work for me.
As long as you can get to it in a emergency within a day 2 max then yes. I've had issues with online banks limiting my money. I was sleeping in someone's spare bedroom trying to get a place to live and they limited me. It was less than 10% of the money I had in there too so it's not like it was emptying the accounts. It was a bad time.
I am fairly new to investing and financial literacy but I have put my emergency fund money into a index fund. It is not much but if I take it out I could get hit with 12% short term capitol gains tax, if I hold off until it is considered long term capitol gains (0 percent) then I can switch it to all cash without me getting hit when securities are sold.
Joe Doe Dave recommends never have your emergency fund in an investment, always have it in a liquid state. It's there for insurance. Not to make money. My suggestion is to leave the money already in the investment and then just begin to stash away your emergency fund in a savings account attached to your checking account.
Well minor car repairs happen a little more often that major car repairs. I would use the emergency fund if it's like "new transmission needed" or something like that. But oil change? New breaks? Use your regular income and dont touch the emergency
Major repairs, use the emergency fund. General maintenance, general repairs, you use your normal cash flow. However, nothing wrong with having a separate account with around $500 just for general car servicing.
What do you do if you dont make enough money to save up an emergency fund & retirement ? I make about 3000/mo and i have 2000 in bills before groceries, gas and other little pop ups that seems to take all my money away
I was making a whole lot less than you were. I started off by saving $5-$20 per paycheck. The money built up faster than I thought. It’s doable, you just have to be disciplined.
Does anyone know how I can ask Dave a question? I was just looking at his 7 baby steps and had a question about when to start. My wife and I are moving to Florida this week and we are renting an apartment and don't have a house to pay off (step 6), but we want to try for one in the next year. Do I start the steps now, and if so how do I save for a house down payment while in other steps.
If someone can answer this, i do have 6 months worth of emergency fund and have a stable job. How should i keep this EF secured? In a savings account or something? i know we are not supposed to invest EF but this is a lot of money which is losing its value because of inflation.
Is the following a suitable use for part of the emergency fund? If I pay local taxes as a lump sum upfront I get a 5% discount over paying it in quarterly installments. We would normally be able to reinstate the funds within two or three months.
Barrie Nimitz , your 12 month emergency fund should include your local and property taxes and therefore you should be able to save the 5%. You must refund these payments each year as you make the payment.
After three years of paying off over a $100k in debt, I finally have an emergency savings of $25,000. Recently diagnosed with cancer, I can't tell you the peace of mind I have because those funds are there. It's one less thing to worry about.
I am so sorry about your diagnosis wow 🥺
you’re strong! You got this 💪
Lord can heal you. I've heard that fasting can help with cancer treatment.
Sorry to hear💔
How are you doing today?
I can honestly say no one has able me to think about my finances like Dave
Makaveli The Don me neither... but now we know!!!
are there other personas like dave?? just discovered his channel and im hooked!
agreed, i love him! he has it figured out
Me too!! I thank God that I found him. I'm from another country and his advise has helped me alot! I'm on baby step 3
Me too! =)
I just got my first job out of college (graduated debt free) and started my emergency fund. $1,500 in my check engine light came on. Something was wrong with my gas lines and it cost about $600. The emergency fund was amazing to have.
I had an emergency fund of $3K. My minivan with 196K miles broke down, and it wasn't worth investing anymore. Buying a used replacement minivan wasn't easy, but I did it, without a credit card or financing. Praise God, I endured the emergency. I am confident the fund will be built back up again.
198k that is a lot of mileage so wasn't that something you saw coming up? I always factor maintenance and repairs in my budget. My emergency fund is for the unimaginable like a pandemic.
I see that you tried.....so in the end, I hope that you have been successful, and please be Blessed for your effort! Financial issues are extremely tough!
@@barbaraleszczynski2214 I succeeded . Thank you.
🙏
Cars should be taken around the barn and shot at 7 years. Get rid of them and sell them off. They will probably still work beyond that point, but the maintenance costs will be higher than the depreciation. A lot of people will say "you could get lucky", but the reality is that all cars needs maintenance and all maintenance costs. (Via sweat equity or paying a mechanic.)
My life is about to change because of Dave Ramsey’s advice. I was looking for something completely different on UA-cam when I found your video. I’m currently working on baby step #2 .God is good.
All the time!
Thanks Dave. I saved 1.5 years of emergency funds because of you and riding out this storm. My dumb friends didn't listen and now they are in deep doodle because of the current situation.
$13K in my emergency fund so far. That's about 4 months of expenses. I'm trying for $20K by the end of 2020.
👏👏👏
Excellent
My emergency fund, which used to be my life savings and my retirement savings, ballooned to $200k over the past decade. I know now to start allocating some of that money into a Roth IRA.
Did you make it ?:)
Today, 12/26/20, we hit our FFEF!!! 25k in the bank! My husband said, 'now what?' I said, basically, we start our savings! That 25k is a wall behind our back, and we need to pretend it doesn't even exist. It took 27 months! Good grief.
I listen to Dave regularly, although I never had loan in my life I still find is so helpful to stay motivated and save money. I mean...I’m doing baby steps as well. I was just able to skip Baby Step 2!
Debt free screams are the best! ❤️ Thank you Dave, for all of the people you’ve helped in your life!
The foundation analogy says it all. Once you build your foundation/emergency fund, it remains there while you build on top of it.
This is the best explanation of the practical value of an emergency fund that I have heard. Clear. Jargon-free. Logical. Thank you.
Bulk up those emergency funds during the virus when you can.
I am 33 years old and make $48,000/year. I started Dave Ramsey’s program 2 years ago and in that time, I paid off $18,000 in debt which was a combination of student loans and credit cards. I am almost done with baby step 3. I currently have $8,500 and should have a fully funded emergency fund at the end of next month. Feels like forever but like Dave said, the $10,000 fully funded emergency fund takes forever just like a foundation of a house. I wish I would’ve done these steps at 33. But I am hoping to say when I’m 43 that I was glad I did these steps at 33!
I'm 71. At least I'm doing something!
I can’t thank this guy enough, wish I followed his programme sooner.
Me too!!
Me 3
So true I was laid off from AT&T December first. I survived off my 401k. I now have learned to be prepared
youknowyoulikeit1000 why were you laid off
Nice2347 Because businesses down size and maybe her store didn’t make enough money to pay here. If she was fired it was her fault. So don’t let people say “I got laid off” instead of them actually being fired.
This woman above probably was subject to actually being laid off from a telephone company that is probably losing much of their old success. Aka not her fault.
Nice2347 budget cuts due to the merger with Directv. I’m doing better now.
YIKES. Been there done that. I had to pay 7k in penalties. It hurt but I got it paid off.
youknowyoulikeit1000 I did something very similar. We all live and learn.
I really liked this explanation. I have an emergency fund and I was getting bummed about the low amount of interest. I needed to be reminded it was an insurance policy against emergencies.
Dave, thank you for being the voice in my head when I’m about to do something stupid with my finances- Since watching you in February, I have saved up USD1,000 (Php 50,000) in my savings account and it has given me confidence that i really can do this!!!! Love from the Philippines!
You must view your cash emergency fund like an insurance policy, and once you have it guard it carefully. It is NOT a piggy bank. You should not dip into it for incidental expenses. Use it only in the event of a true emergency, and hope that an emergency never comes. Remember, once that money is spent the time it takes to replace it is always much longer than anticipated.
Listening to Dave has changed the course of my life! I thank God for this man!!
Sad i won't make my emergency fund goal for 2020 because i have to go into it. Rarely have i had to if ever. When Dave says it's not if but when an emergency happen. It's definitely true. I came home from work to see water spewing out of my toilet, had been going all day. To the point water was coming from underneath brick outside. Literally all carpet had to be taken up. Im hoping this won't put a huge dent in it but i am prepared for 1000$ for deductible. I have about 6 month worth put back. I'm going to be ok. This maybe a good time to upgrade flooring on the bright side.
Oh my gosh...I listened to you every night on my way home from work and I just saw this video. Nothing at all what I thought you looked like...lol. I had a vision of you tall and thin...in a suit. I'm so glad I found this to put a face to the voice. Love it!!!!
I agree with someone else who commented. It would be cool to do an emergency fund theme hour like they did the millionaire theme hour. Or things people budgeted for and saved for besides cars or weddings
Thank you Dave you are only person who's talks the truth about money. Nobody I ever meet gives me the tips you do! God bless
Perhaps the most valuable lesson my Grandmother taught me was to have some money put aside for a rainy day, well that day came 2 years ago when my transmission died in my car but luckily I had close to 4000 bucks tucked away from working overtime and my tax refund and was able to buy another car now that it's paid off I keep an emergency fund strictly for car repairs
Thanks, Dave. I can honestly say, I Understand now.👍
Amen - thank you Dave. Just rebuilding my fund after I took a part of it to fix my car
Well I have $430 in emergency funds in my Ally Bank so far ...
Miguel Angel Medina Rise GOOD! It might not feel like much, but being in the habit of saving is so important!
Better $430 than $0! You’re on the right track. Think about how many people don’t even have that and haven’t even thought about saving yet.
Good for you. Better than nothing
Better than $0, keeping saving and in no time it will add up.
Love Ally savings. Mine is there as well.
6 weeks in and I have to use my emergency fund for the first time. Feels so good not having to worry where money is gonna come from
We get it. We have truly "gotten it" for almost ten years now. Emergency fund, baby steps, cash envelope system, investing, being debt free, living like nobody else. We get it and are doing it thankfully. So grateful to you DR.
The cash envelope system was a game changer for me!
I love the foundation of the house metaphor. So true for the first few baby steps.
I needed to hear this. Thank you, Jordan from California, for asking!
We had our baby e-fund... $1000. We had some car issues... $500bill... thankfully we were prepared.
Thank You Dave Sir, as per your advice I saved money as an Emergency Fund and it helps me Lot during OFF Season of my Business.
Just an incredible explanation of emergency fund
I agree.
Emergency funds are being used now.
On baby step #3 for my emergency fund and got some money tucked away. Feels good to be debt free!!!
what sucks is I gotta keep around $20k in my emergency fund in case my company closes its doors and it takes me 6 months to a year to find another job... Civil Engineering was not the career I thought it was going to be
That's the FFEF that Dave advises for BS3
It sounds like when I worked in a hospital Security Department and we were one of the few non revenue generating departments But it was necessary for the health system to spend money to provide security to protect the revenue generating interests they had.
Thanks for setting me straight about this Dave. Glad I found this video. Also I shared your channel with a friend today that had questions. :)
Hey, Dave. Maybe you should go into what an emergency fund can be used on. For example, someone needs new tires because they put 60k miles on their car tires with 2/32 tread left. They KNEW this was coming. This shouldn't be taken out of an emergency fund, right? As opposed to relatively new tires getting blown out on giant nails on a street. I think you touched on this before but it would be nice to dedicate a segment towards it.
Lance kaminsky Yes, Dave calls those sinking funds.
The key to remember is that an EF is for anything "unexpected". Anything. Regardless of whether you have a sinking fund for it.
RE: Your scenario: Regardless of knowing and saving for replacement tires if something unexpected happened before you saved enough - like the tires blew out or an accident - You would still need the EF.
I keep a spreadsheet with all my totals and amounts. I have a column with my emergency fund and all the upcoming expenses that I can for see and when they're due. (Car tires, dental work etc.)
I then try to spread out those purchases so as not to deplete the fund too much. It would be a lot of work to make each one a separate fund.
In a perfect world, my emergency fund minus upcoming liabilities would be equal to 6 months of expenses.
Hopefully something as cheap as tires would be cash flow, if not buy a cheaper car. This is another disadvantage to 4WD/AWD because if you're 1/2 way through a tire and it blows you can't just buy 1 tire.
Well if you need 4 tires it isn't so cheap anymore. I need 4 tires to pass inspection. Buying a different car doesn't make sense for me.
I can pay for the tires with cash flow, but i still like to track such things. There is always limited cash flow.
Also I think its a good idea to have "Get Me Home Fund' of ~$200 hidden in cash in your car so you dont get stuck somewhere if you wallet / phone gets lost or stolen and you cant buy gas or food. I was at Wawa and a guy was asking for $$ because he said his credit card did not work and his phone was lost and he didnt have any cash to buy gas.
I agree This has helped me when flat tire and my wallet wasnt with me.
Venmo
Sounds like that guy was scamming you. Or was your typical panhandler.
That guy was scamming you and was relying on your (retarded) goodwill
He should have a TV program !!!!!!
UA-cam is just that bro
There are a lot o people with no Internet, old and young, they still have TV with antenna and get the signal by the air ( in USA)
John Smith , young people are dying too because of the virus
I have a 40onk
Tv is unfortunately dying bro 😂
Car AC just went out (I live in the Midwest so driving without it is suicide) ...repairs cost $1.1k....putting this on my emergency fund.....if you're reading this...get your 1k fund now
Glad I found your channel Dave, gonna watch your videos cause I like lesrning about finances and saving money
It's not an investment but I was concerned about limiting the depreciation in value due to inflation. Thinking in terms of insurance provides some clarity, thanks Dave!
Thank you Dave !! You're awesome.
True . My other car broke down and luckily I had EFunds for it Instead of using credit card
A question you DONT wanna ask in an emergency "Where da money at??"
LOL. yep....and I’ll ya got in your pocket is lint.
I'm in the uk we don't have the same accounts and tax,and also don't have to pay for health care , but some of the steps can still be done here are health care is payed through our taxes
2.24% savings account with Wealthfront! Beats what you can get at normal banks
Thanks Dave, AC
just broke. paying $3500 cash to replace thanks to our emergency fund.
Wow best explanation ever .Thank you Dave🙏🏾
You will pay tax rate on your 401k regardless. It's the 10% penalty that's bad, open a Roth ira as well if you may need the money sooner that retirement age. In a perfect world don't touch any retirement.
Pat the thinking is you will be in a much lower tax bracket once you retire and no longer earn a paycheck from a job when you’re collecting from your 401k.
Hi Dave, I'm 62 years old and on disability retirement. Afraid I smelled the coffee relatively late in life; I squandered away too much time and money. What's done is done, no sense wringing my hands about it. I'd like to travel in another 10 years and hope there's still time for me to make some money in investing (?). I'm at a loss on which direction to pursue. I own my home free and clear, have no high interest debt and have a 15K emergency fund. My biggest expenses these days are property taxes and insurance. I'm currently saving $1,500 to 2K per month. What's the best direction for me to proceed that's relatively safe and will provide the best returns?
I had a 6 month emergency fund before i started watching Dave because it makes me nervous for the reasons he just listed...
Two thumbs up. This is a really helpful perspective on my emergency fund.
building my emergency fund starting friday :) march 10 starting with $0.
Dave Ramsey you’re awesome
Thanks Dave!
I have a fund of half of my savings sdt into a bond fund invested in CA bonds which means all income is not state or fed taxable(cause its bonds and ca cant take it cause its CA) my ELP told me about this.
The funds are instantly available via ATM card or check.
historical and current is around 5% ROI.
I figure even if it only gets me 1%-its 0.99% more than my bank.
BTW im self employed and the money in this is half of every check as a hedge against annual taxes and expenses. this is my emergency/tax fund and cant not be otherwise touched.
I require myself to live off of half of every check received.
ccpanel I'm going to look into this do you have links
Thank you for the clarification Dave! I just recently found your show and I’m almost finished with Baby Step 1. I was wondering if it’s better to keep the emergency fund in my savings account, all in cash, or half and half?
Dave recommends a bank account with check writing privileges. I use an online savings account that pays about 1.3%. It does take several days to transfer the money so for that to work you gotta have enough cash in your regular account to cover sudden expenses like a tow truck.
I keep a certain amount in each account as a minimum balance. I never spend it but it's there in case of some automatic payment I forgot about, or any other small mistakes. I'm also self employed, so sometimes I get paid late and need cash on hand to wait for checks to arrive.
You may want to keep $1,000 of the EF in checking and put the rest elsewhere. (adjust numbers per your expenses)
In one of his books, he talks about a client who framed it, wrote "break in case of emergency" on it, and hung it in the back of her closet. Some people just keep it in their checking. If you know you would spend cash that's lying around, then don't keep it in cash. Put it in a bank account you can control yourself from.
Hope you're not still on BS1 a year later. Good luck with your journey!
Sometimes it’s not or, sometimes it’s and. Your emergency fund can act as insurance and also earn a good rate of interest. You can put it in an online bank paying 2.07% interest. On $10,000 that is $17 per month. I’ll take it!
In India some banks give 6% on savings account
Right now I have about $9k in my emergency fund... if it wasn't for paying off the $6k I owed on my car this year, plus the $4600 in furnace repair, car repairs, and doctor bills, I'd have a lot more!
I just fulfilled my emergency fund! On to Step 3B👌🐝
What % of Net take home pay should be emergency fund before it’s built in full? 50%? I have a challenging question. What advice do you give sales people whose cashflows fluctuate unpredictably from say $2,000/week to $10/week, with bills to cover monthly? And should one get the flu, you’re out all your income a week but bills don’t stop coming in. So there’s HUGE tendency to underscore the risks of income disruption when things are good.
Very well explained. Thanks Dave. 👍
Thank you sir for this incredible lesson. When you say $1000, should I translate it to my currency, for instance that will be roughly P10000 (Botswana money). Many thanks, looking forward to your response
I’m very glad I found this video. Just started baby step 2!
As soon as I saw the word ‘rant’ I knew I was hooked
Wow Dave! Have listened to many of your videos. First time, and enjoyed you talking about The importance of an emergency fund, so that you don't cash out a 401k! Of like you said, "Pennies on the Dollar", and aka early-withdrawal penalty! Thanks a bunch and look forward to more of this topic. Most of us poor folk will become millionaires off of 401k; just like you said of the majority average of low to middle class people become millionaires off of 401k's.
Thanks....needed to hear this.
I haven't listened to Dave in about 15 years, show is still exactly the same because most people are normal and normal means stuck on stupid
No it doesn't dude. Not everyone has financial savvy. Doesn't make them stupid.
Absolutely true, Dave. It is nice though to keep up with inflation if you can. I am not saying treat the Emergency Fund like an investment, but I am saying find a Savings Account that gives 1% or more. They're out there.
Just a quick question, had my car break down on me and had to buy another one sadly enough draining my emergency fund.
The question is: do I stop investing my 750 a month in my 401k and s&p etf's and put it toward building the emergency fund back up.
Sell quite a few etf's to get back to my 7.5 k emergency fund?
Thank you. I needed to hear this.
Everyone in these video comment sections about their EFs being really high.
The general internet: 3-6 months.
I think us in the comment section are winning because we can weather the worst of storms, considering some stuff like....idk, medical emergencies (USA) can cost way more than your 3-6 months worth of expenses.
What a difference 2.5 years will make huh???Does everyone still have that 10K??? Better still is it in a MM fund?? And is it actually earning money or gathering dust??
I too am re-building my EF but its going into a 30-60 step CD Ladder.. and IF I have to tap it then so be it.. That is what its there for...I hang onto the CDs for better than twice the length of the Early Withdrawal Penalty so that I get at least half of the projected interest benefits, and am constantly looking for better offers..When that little (short term) CD matures it has already paid for the future EWP, because most EWPs are based upon as little as a few, to maybe a year of interest penalty, and since the CD is already matured and earned 4-6 times (short term) the interest of typical savings it gets put into long terms earning 20-25 times typical savings, and 4-5 times MM..
Eventually CDs aren't the answer because there are financial instruments that earn better.. but for the beginners, and builders, CDs are probably the best balance to earning option
my classmate asked me to go to a 3 day"spontaneous" trip to Paris, old me will be a lil jealous. But post Dave Ramsey me is calm as my $3K sits happily in my bank account.
I'm 37 currently making $10.00 an hour after losing my job in March. I have an emergency fund and I will have it up to 28k by the end of November. Just stock piling cash because I don't know what to expect leading into January. I took this job through a temp service because I was desperate for income. I need to find a way to make my money work for me.
Have you gotten a better job?
So should I not put my 10k emergency fund in a ally bank 2.20% savings account?
Black Thought doesnt matter, $220 a year wont change your life
As long as you can get to it in a emergency within a day 2 max then yes. I've had issues with online banks limiting my money. I was sleeping in someone's spare bedroom trying to get a place to live and they limited me. It was less than 10% of the money I had in there too so it's not like it was emptying the accounts. It was a bad time.
Fantastic Dave. Just Fantastic.
I am fairly new to investing and financial literacy but I have put my emergency fund money into a index fund. It is not much but if I take it out I could get hit with 12% short term capitol gains tax, if I hold off until it is considered long term capitol gains (0 percent) then I can switch it to all cash without me getting hit when securities are sold.
Joe Doe Dave recommends never have your emergency fund in an investment, always have it in a liquid state. It's there for insurance. Not to make money. My suggestion is to leave the money already in the investment and then just begin to stash away your emergency fund in a savings account attached to your checking account.
That’s not an emergency fund. That’s investing. You need to have your emergency fund in a savings or checking account.
I started a savings account for vehicle repairs by itself. Is that even needed or should I put that all in with the emergency fund
Well minor car repairs happen a little more often that major car repairs. I would use the emergency fund if it's like "new transmission needed" or something like that. But oil change? New breaks? Use your regular income and dont touch the emergency
Major repairs, use the emergency fund. General maintenance, general repairs, you use your normal cash flow. However, nothing wrong with having a separate account with around $500 just for general car servicing.
I wish I would heard of you sooner paying off all my cards will never by new car again on payments lol
Thanks for explaining this .
my question is what’s the difference between the emergency fund and saving for other things? or you know spending money? (trips and dates, etc.)
Will people on SSDI get in trouble for having $1,000 in the bank for emergency funds
Jessica Rupe thanks for the info
Whats the rule for emergency fund size? 6 months of expenses?
Agree. Baby step no. 3.
Mark G I do say 6mnths
Good question
@@elizabethtimothy9510 Sounds about right.
THIS was so helpful
Ally Financial offers 2.20% for their savings account currently
This is online only bank right?
How do I apply?
Daniella Moreno download the Ally app and create an account. You can also call customer service for help
Just lowered to 2.1% today. I’m switching to wealthfront.
Why not let it make you money? An online account that gives you 1.5 isn't bad if you're just letting it sit there
Capital one 360 Money Market gives you 2 percent if you have over $10k. Pretty good
Emily Browning American Express Personal Savings has the same rate with no minimum balance.
What do you do if you dont make enough money to save up an emergency fund & retirement ?
I make about 3000/mo and i have 2000 in bills before groceries, gas and other little pop ups that seems to take all my money away
You can start small. Try saving 50 or 100 a month. Is there a way you can reduce your bills or increas your income?
I was making a whole lot less than you were. I started off by saving $5-$20 per paycheck. The money built up faster than I thought. It’s doable, you just have to be disciplined.
I agree start out small, that’s what I did. If and when you get a raise put 1/2 towards your emergency fund or future retirement, like a Roth 401.
Does anyone know how I can ask Dave a question? I was just looking at his 7 baby steps and had a question about when to start. My wife and I are moving to Florida this week and we are renting an apartment and don't have a house to pay off (step 6), but we want to try for one in the next year. Do I start the steps now, and if so how do I save for a house down payment while in other steps.
Kevin Tiemann First, steps 1-3, then save for house. You can find more answers by searching Dave Ramsey when to save for a house.
Did you get a house?
i would keep it in cash in a safe place or easily to access.
If someone can answer this, i do have 6 months worth of emergency fund and have a stable job. How should i keep this EF secured? In a savings account or something? i know we are not supposed to invest EF but this is a lot of money which is losing its value because of inflation.
High yield savings if you concerned about inflation.
Is the following a suitable use for part of the emergency fund? If I pay local taxes as a lump sum upfront I get a 5% discount over paying it in quarterly installments. We would normally be able to reinstate the funds within two or three months.
Barrie Nimitz , your 12 month emergency fund should include your local and property taxes and therefore you should be able to save the 5%. You must refund these payments each year as you make the payment.
I have my fully funded emergency fund topped out at 15k, should I put it in a money market?
Where should retired seniors put their emergency retirement fund example between 200k to 500 k?
I’m from UK what’s a 401k?
A S
A Retirement Fund