10 Things You Should Include In Your Emergency Fund

Ok, so we’ve all been told a million times that we need to save up money in some type of emergency fund or else right?  Well if I’ve learned one thing during the past two recessions it’s that the process is a lot smoother when you have extra cash in the bank.

Now don’t get me wrong I have those moments where I worry just as much as the next person.  Once we know we have to save some money the question then becomes, what should we save the money for?

Below I have compiled a list of 10 things I include money for in my emergency fund.  If you have something other than the 10 I mention below, leave a comment and let us know.

10 Things To Include In Your Emergency Fund

• 1.House. This would include your mortgage payment, things you need around the house to survive like toilet paper, laundry detergent, soap and of course anything else you can think of here.
• 2.Insurance. This would include your health insurance, life insurance, homeowners insurance, and maybe disability or long term care if you have it. These things will become vital assets should you happen to lose your job. These items also reduce your risk and if you neglect to keep them you may face an even longer hardship.
• 3.Energy. Energy would be things to keep you going like electricity, gas to run your car, propane to heat your house, water and sewage. Without all of these necessities you will not be able to survive on a daily basis, unless you’re going for that 1800′s survival method.
• 4.Vehicles. If you have a car or use transportation whether public or personal you are going to need money set aside for this use. This would include money for vehicle repairs, oil changes, tune ups, or money for buses or trains if that is your main mode of transportation.
• 5.Taxes.If you have a job, a home, and investments you pay taxes. This must also be factored into your emergency fund. Taxes are definitely not one area you want to skimp on. The government will always win that battle.
• 6.Health. Do you frequently visit the doctor or need prescriptions? While we don’t know when we might get sick, the probability is high and that is why we need to make arrangements for extra cash here. Even if you have insurance to cover most of these costs, in most cases they won’t cover all of them.
• 7.Communication. This would include your home phone, cell phones, internet, cable TV, and even things like texting if you must. The important thing is that you should include money toward these things. Now if things get tough you may cut down on some of these things like the internet or cell phones but you still need money for the phone.
• 8.Food. You need to eat to survive. If it’s planting your own garden or grocery shopping you need to have money set aside to eat, and I should mention, eat well. I once knew a couple who lived off of canned soups because they decided that having a big house was worth the cost. In return, they had to give up a lot of other things like eating out or have that steak on the grill.
• 9.Investments. In this case I am talking about paper assets like retirement accounts but you could also add in other investments such as real estate or home based businesses as well. Just because you may have fallen on tough times doesn’t mean you should stop contributing to your retirement funds. This could have a damaging long-term effect that won’t be felt until many years down the road.
• 10. ‘Just Because’ Fund. What the heck is a just because fund? A just because fund is a portion of your emergency fund for those just because moments. For example, a just because fund is for that emergency trip you took for a Hawaiian vacation. I know that sounds a bit extreme but you have to take things like vacations into consideration, otherwise you may get burned out from overworking yourself. I like vacations as a way to clear my mind so that when I return to work I can focus easier and be more productive.

What Would You Add

Anything you would add to your emergency fund?  I know that everyone saves for different reasons so using the list above as a guideline, what would you add or what wouldn’t you save money for in your emergency fund?   To get more saving money tips click here.

Chris

The post was recently featured on the Carnival Of Personal Finance by Weakonomics.

Tagged as: emergency fund includes, emergency fund should include, emergency fund to include mortgage, saving money tips, what should an emergency fund include, what to include in emergency fund