I save $250 per paycheck, I call it my car payment. I drive a 2005 trailblazer that’s not anything nice or flashy but it’s completely paid off. Every 2 weeks my savings and retirement accounts get paid instead of a debt.
I saved $10,000 last year thanks to your advice and constant reminders about why I need an emergency fund in your videos. I'll be happy with how big it is when I get it to $15,000.
I set up and saved up an emergency fund before I started school in 2019, and squirreled away a little bit more over the past couple years. It’s super small, like $2k, but if my beater car were to break down or if I needed an emergency dental procedure, I wouldn’t be strapped for cash. So yeah, I’m still broke technically, but I feel a lot more secure than I used to!
Everyone needs to make sure they have this level of emergency fund setup minimum! I personally try to shoot for something a little higher but it's all about taking steps in the right direction.
Such a timely video. I just drained my emergency fund by helping my daughter move across country and fixing my car. Time to buckle down and save again...
Emergency funds values are very personal. Although the advice is to have between 3 to 6 months saved up in an emergency fund, I prefer to have a years' worth. That number brings me peace of mind.
I found a blogger who was building a year’s worth then putting it all in CDs a month’s worth at a time so they were rotating. That way they had the year emergency fund but were gaining interest on it at the same time
I agree, I'm more comfortable keeping a years' worth of expenses in my EF because my main business operated on a seasonal annual cycle, so if something happened to mess up my work season (ie covid) I would lose a whole years' salary. Thank goodness I kept a larger fund!
The past year and a half has really demonstrated how important it is to have an emergency fund for sure 🚨 saves so much stress to get ahead when you can 💆♀️
I'm so glad I started saving an emergency fund with around 4 months worth of expenses last year, because I'm working an unpaid, full time internship for 12 weeks this semester. That time/energy commitment means I've had to cut my hours at my part-time job, although I managed to keep a good chunk of my income rolling in. Basically, my emergency fund is taking small monthly hits until November to help cover the difference. I am definitely going to keep this challenge in mind for after graduation this December, because I'll be looking to quickly re-up my savings account so I can move back towards my other financial goals!
Emergency funds are so important! I've gotten mega screwed recently due to not having any wiggle room funds, which just opens you up to predatory loan companies.
Hi Chelsea! I truly hope you read this. We moved from Spain to the US a couple of months ago, and I will say that the American financial system is really confusing. It seems you need credit for everything, not only for buying a car or renting an apartment. We have been asked for our credit score to set up ELECTRICITY when we moved to our apartment. Since we don’t have any credit, we’ve had to pay security deposits for everything. I will not rant about the absurdities of my experiences (I was brought up to think that if you couldn’t afford something, you simply wouldn’t buy it. Asking for credit was for people trying to live above their means). As someone who has lived in several countries as an adult and travel many times to the US for holidays, it truly was a shock when I had to face the financial system. I wanted to suggest if you could do a video on how to start building credit, which banks do you recommend, etc. A “home finances for dummies”, 101 of finances in the US for a young couple who is starting with no financial history. Thanks for your videos and the great work you put into them!
THIS IS EXACTLY WHAT I NEEDED TO SEE TODAY! it's so easy to feel overwhelmed about the time-sensitive aspects of money, "i coulda/shoulda/woulda started saving or investing or budgeting differently x number of weeks or months or years ago and i feel bad that i didn't so what's the point of starting now..." tfd vids are super encouraging and motivating, LOVE this call to action to set some specific goals today for the last few months of this year. hell yeah let's gooooooooo!
To me the best financial advice for someone with a low budget (but basically it is great for everyone) is the 365 (days) rule. Track daily expenses for an entire week and try to identify the invisible small spendings that quickly add up to larger sums. Multiply with 365 days (1 year) Daily café to go: 4$ x 365 = 1460$ Daily lunch break: 10$ x 365 = 3650$ Daily commutes: 5$ x 365 = 1825$ I stopped buying my coffee outside and cook instead of eating out for lunch. Eating out is something I want to celebrate and not a daily thing bc I try to convince myself that I don't have time to cook. I also switched to using my bycicle more often instead of taking the metro. Of course the numbers are a little bit off bc you still have to subtract the costs of cooking and making your coffee at home. But they can give you a perspective on were you might be wasting money
In the last 5 years i've had to deplete my emergency funds 3 times, it I hadn't had this saved money I would have had to take a loan, so it's really important to have at least some money. My salary is low and my rent is 50% of it plus bills etc, so I don't manage to save as much as i'd like tbh but a little money on a regular basis can add up
Same as me, my emergency funds allowed me to moved states and start a new job. I’m not longer 9-5 job. I’m practically retired, I’m only 46 years old and I keep saving…
Great job. Now that you have that fund, you can double up by ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-Hd2M7dPahL4.html using your mortgage as an extra emergency fund
Still continue to save left over change into high yield savings. I too is living off my savings due to job loss, but still save by creating financial challenges.
Smarty Pig appears to be a Sallie Mae bank. There's a fair amount of predatory and unsavory information on Sallie Mae. I am sad to see TFD advertise such an affiliate :(
I already have an emergency fund (thanks to finding this amazing channel a few years back) and recently I unexpectedly had my housing situation changed, which caused my to withdraw some money. It truly was a great feeling to be able to not stress so much and just *have* that money ready but now a new month is here and I withdrew some money again, as I still have some higher, unusual expenses. What if... it won't stop? There is always a reason to justify extra spending and I am anxious that I will just drain my emergency fund quite fast on smaller things that will add up -- any tips on when to allow for these withdrawals and not stress about them and when to block them and start saving again?
Without additional context, I would say when you get down to a certain dollar amount that scares you. Also look at if you can really afford it without taking from your savings, and weigh having things done now versus waiting.
My husband and I are living on 2,300 a month and we use "a car payment" as a unit to measure stress on our financials. If it's more then the car payment of $350 it's OK to take a bit out of savings as well as checking to pay for the thing. If it's less then the car payment we pull it out of checking and factor it into the monthly budget. We live in Colorado on the front range where living expenses are insane but with this method of using the highest bill (the car) to work backwards its really helped us define what is comfortable and what is a stretch for our saving vs checking budgets.
Sometimes you get very unlucky and have not one but two or three months of higher than usual expenses. Just ask yourself if you're making an excuse to spend the money or actually need that purchase.
I think you need to be honest with yourself about these "unusual expenses" - are they truly one-offs as you adjust to this new life? (Moving expenses, deposit on apartment.) Or are they unusual to you now, but you have to get used to them because they're your new normal? For the former, it's ok to hit your emergency fund as truly needed (& build it back up as soon as you can). For the latter: figure a way to work it into your budget - maybe you need a sinking fund? (You put in x every month, knowing it will be tapped a couple times per year.) YNAB calls this "embrace your true expenses" & you don't need to use their software to learn from their philosophy. Good luck!
I recommend making sure your emergency fund isn't visible and available to you on a daily basis if you haven't already. I keep mine in a separate account at a separate bank, so I don't subconsciously 'add' it to my money when I'm figuring out what I can afford. I had to touch mine for the first time ever recently, and I ended up cutting back another spending area in my life significantly for a number of months to top it back up again because I hated the feeling of knowing that my safety net wasn't as big anymore.
Having emergency fund is one of my biggest pride, as I changed from being poor and financially illiterate. Luckily I have it before COVID hit. I just can't imagine what if I didn't make it before. Now I'm still building it up. It goes up a bit slower now as I can't get my side jobs (needed to give them up to ones who needed them more than I do, because we are friends). Also have to cover some family expenses. After all, I'm fine that I don't have to worry much. I still can be cool, sit and find my way out.
About 3 years ago I was working hard to build my emerge fund- then the garage ceiling collapsed on my car (car only ended up with a dent!) at 5am in the morning. So yeah, I'd say I was VERY grateful that I built that up! Do it, kids!!
although there is no way i can save this by the end of the year... i couldn't even save a thousand by the end of the year and at first i got depressed but then i looked at it this way even though i can't save that amount i can save something! and since i have no savings currently saving anything is better than nothing. so i am going to challenge myself to see how much i can save by the end of the year and focus on building the habit of saving monthly.
This is probably the a simple but complex topic in my mind and something no one ever taught me and I’m hoping you can! Can you make a video about how much to have in saves Vs invested. Everyone always tells you to invest and save which yes but at what point do you have “enough” in your saves and your better investing. I know different factors play a role such as you income and emergency potential, if you planning to make a larger purchases soon etc but what’s a good standard or rule of thumb for an average income with only typical cost of living and expenses.
I saved 6 months of living expenses (American living overseas), cost of relocation to one of my parent’s, and 6K for unknowns. It took me 2 years to complete. Figure out your minimum cost of living expenses (rent, utilities, anything transportation, groceries,, etc). Multiply by X months, open a savings account you won’t use and automate deposit (if you can).
@@shaquicedacosta so one hour had that in saves then did you have a separate savings for fun things like vacations? Or did you just start investing everything else unless you were saving specially for a travel event etc?
@@MsSportychic11 I have multiple savings accounts 1. Emergency fund (try to aim for 6-12 months) 3 months minimum 2. Trip fund (I like to travel) 3. Retirement The rest you can invest
@@John.Smith2022 see it’s that retirement fund amount I struggle with because everyone tells you to save and invest in your future which yes 100% but at what point is money sitting in your retirement fund in your bank better off being invested
@@MsSportychic11 I should clarify. I’m Canadian and I have my retirement (RRSP here) invested in mutual funds. Every month I add to it more mutual funds are bought. Emergency shouldn’t be invested as you may need it ASAP for an emergency. Once your EF is complete then you work on additional savings or investments. Some people invest everything after an EF.
I have appx $3500 in an emergency fund and am not sure what should be my next priority: building on savings, investing for big goals like a house, or retirement??
I just started an emergency fund savings account and I reviewed my budget and I’m able to save $600 a month and I feel really good about that! My next venture is to get a side hustle income so I can up that monthly amount! I have a short term goal of $6K in 6 months and $15K in 18 months. I’m also going to start saving for a trip to Europe! Thank you for this wonderful video and excellent channel!
Credit cards can be a useful tool if you use them properly, allowing you to build up credit history, which is essential if you ever need to get a mortgage for example However, if you don’t trust yourself, you can always cut up a credit card on arrival but not close the account, so you have a line of credit open which looks good on your credit history, but you can’t touch it
Omg i was just updating my google sheet since i started tracking my expenses this year. This video came at the right time. My goal is to build my EF by EOY too!
Yay. I just started having 10 percent of my net automatically sent to savings. If I don't touch it by 2022, I will have a little over 2000 dollars saved by the end of 2022.In 2023 i hope to switch focus to a different savings to start saving to move out of my apartment.
Something that usually makes me cringe about TFD vids is the emphasis put on getting a side hustle. So I'm beyond happy that we are finally ready to qualify that: "a low impact" side hustle. Dog-walking: where side hustles meet self-care.
Agreed! I love TFD, but the glamorization of the "side hustle" is so tired and toxic. I know sometimes it's a necessary part of life for so many millennials, but the reality is it shouldn't HAVE to be necessary to make end's meet.
It's not a "TFD glamorization", it's the reality that having multiple streams of income may be very essential for maintaining finances and growing your savings, especially at this time. You're right, it shouldn't have to be necessary, but it is. How is this toxic?
Having a few thousand dollars is allowing me to move in with my girlfriend and start a new job (with higher pay) without worrying about closing my lease earlier than expected. I'm very glad I have it and I hope I'll be able to build it back up and even bigger than before.
I appreciate the tone of this video. 😊 TFD, could you also make a video on how you evaluate if an additional job is a good idea or not? I would like to know your perspective on this. I feel this is more useful to a more universal audience than specific work suggestions (dogwalking, teaching, etc.). For some of us living minimal lives already/don’t have anything to cut back on, the way to save up more is to earn more. Thanks! Edit to add: I have strongly mixed feelings about earning more by working more and just can’t wrap my head around it. I know that by now, we’re all aware that intense hustling is not the best thing. But I still feel a fleeting pressure in the air to earn a bit more so I can compensate right now, for an uncertain future. Many people have been financially shaken because of focusing on one job only and I’m scared, tbh. To hustle or Not to hustle - that is the question. 😞
Personally I think there are periods when it's good to hustle sometimes, but it's important not to let that translate into a mentality of always needing more so that you can then never stop hustling. I had to use some of my emergency fund during the pandemic, and for a number of months after that took on a lot more work so I could build it back up again. It was a busy period of time, but now I'm back to my regular work hours and have my fund topped up again so I can sleep well at night.
I appreciate when you guys regularly touch on a seemingly 'basic' financial topic like this, and provide advise that is relevant for many people with no-barrier entry. Not everyone is in the position to 'diversify their investment portfolio' 😅 but everyone can take a step towards building an emergency fund from scratch 😊👌
Going to use this as the motivation to light the fire under my ass in regards to income. Plans; 1) Aggressively pursue my tax refund (it's still being held up) 2) Begin offering tutoring sessions online as I rebuild my childrens books website 3) ... draft *cough* alternative *cough* literature as short stories for adults (Hey - It pays) I can't cut my budget as I'm already living at my dads and broke while going to grad school, but I CAN be more aggressive about alternative employment solutions in the mean time.
@@marthas3026 I had a couple of ebooks published, there's a pretty big market for kindle stuff there, although I know some people draft stuff online where they get paid per click. I got nervous about it though (even though I used a pen name) when I started publishing kids books and then applying to grad school in case it ever got linked back.
I'd love to know how to aggressively pursue my tax refund. Mine has also been held up but when I at last could talk to someone, they said it was due to short staffing and a tech problem, and there was nothing that could be done about it.
A good amount of Emergency Fund is important, I've weathered through unexpected events/expenses because of my fully-funded emergency fund, also helps to not be on the red and/or get into debt.
Don't stop at 6 months of expenses. Alwaus contribute to your emergency fund. You can put in a little less down the road, but don't stop. Treat it like the Fleetwood Mac song: don't stop, we're thinking about tomorrow.
Always smart thinking of the ways you can make small cuts here and there to increase your savings rate. Finding ways to increase your emergency fund or investment portfolio is always a fun challange!
I grew up poor and remember the struggles very well. Savings has always been a big part of my life. I started saving when I was making minimum wage of $4.25. It wasn’t a big amount in the beginning. A little here and there. Now I have years of emergency funds. I also keep my bills as low as possible.
Yeah - I looked into delivering food for a local restaurant- but the cost of petrol ( here in UK atm it is about £1.30 per L) + added costs on my car insurance + wear and tear ( you can find figures of this per mile - depending what make of car) made it not worthwhile doing.
So if I'm renting a typical 1 bedroom apartment in CA, I need about a down payment on a house in my emergency fund (ie. $50,000) this is not achievable for me.
I will be working a salaried job for the first time soon at a University. I’m excited to start saving more. I also will have a opportunity to house sit for a family for many months and therefore I will have way less fixed expenses and I’m gonna challenge myself to live off of one pay check( I’ve done this before) and put the rest towards goals and debt.
I have been wondering what you should do in a country like mine where I get nearly full wages for two years if you become unemployed, and then 50-70% after those two, and indefinitely. Should I still aim that high or would a lower number suffice?
Remember that emergency funds are mainly for unexpected expenses. If everything that can go wrong should go wrong- your car got totaled, your house flooded, your computer and phone both need to be replaced- if all that were to happen at the same time, could you afford it based on your emergency fund alone? That should be your minimum goal.
You should probably have a smaller emergency fund and several sinking funds instead. The sinking funds should cover things you will spend money on in the future but not on a monthly basis. Examples of possible sinking fund categories include vehicles, your house, healthcare, vacations, gifts, etc. The sinking funds should at least cover insurance deductibles when applicable and also expected non-monthly expenses (replacing tires, annual home maintenance, the estimated cost of an upcoming vacation, the estimated cost of gifts you plan to give that year, etc.). The sinking funds will cover many of the situations a regular emergency fund covers and your smaller emergency fund will cover any situation not covered by the sinking funds. Of course, if an expensive emergency happens, you could take money out of some of the sinking funds (in addition to the emergency fund) and use it to cover the expensive emergency.
*Excellent video. I have an emergency fund in savings, and another savings fund for large purchases like a new car and home renovation projects. Not to go off topic, but I'm thinking of taking the savings for for large purchases and transfer it to an investment account for better growth.*
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The philosophy of the rich and the poor is this: the rich invest their money and spend what is left. The poor spend their money and invest what is left.”
My personal portfolio/investment manager, Mr' Adams walter after a whole week of research,he runs an investment platform where you don't have to under go any stress in the trades,he manages my trading
I have been researching all this while for a digital asset investment and I found Bitcoin to be the most profiting of them all, I'm definitely bouncing on the opportunity, thank you so much
If you keep your credit card debt under 30%, even if you still pay it off every month, does that count as part of the emergency fund? I still keep a decent chunk in my savings, but it's nice to know I have access to that credit line if I need it. After finally paying down the card though, I try to be as responsible as possible and use it wisely.
Similar to what I do. I put everything in credit BUT I pay it off every month without fail. I get air miles which means I haven’t paid full price for airfare in years, I have that line of credit just in case, but likely will never need to use it for an emergency since we’ve about 48k in savings and save monthly.
Can't a lot ofan emergency fund be invested in the stock market? Given my husband and I have always been frugal and very privileged, but we have slowly been investing more and more in the stock market, and are only keeping around $10K in our savings account for emergencies. If we need more, we can take money out from our investments, and get the money within 1-3 business days. We can't think of many high cost emergencies where we need more than $10K immediately, and you obviously make way more money investing in the stock market than keeping it in a savings account.
I just wanted to say thank you to Chelsea and the team. Since I found this channel early this year I started to organise my finances more carefully. Though I wasn’t in a bad place financially (lucky) it helped me a lot to categorise my savings instead of just a generic account ☺️
Wth will all the “investing bitcoin” comments? =)) “I follow Mr. Whatever and earn *some thousand dollars* and he’s been delivering ever since” Lol ok good for you calm down
I'm probably not the target audience for this but i find it so depressing that every waking moment has to be spent grinding just to have the teensiest safety net. I know Chelsea's not saying it's ideal to have side hustles and give up the little pleasures but man, our society sucks
@@Dom-xi8je Easy, Vin - at some point, one cannot have fewer nights out with friends, fewer holidays, fewer new clothes, when all those things are at zero already. Where I came from, rent was high, utilities expensive, salaries low, and you pretty much had to decide between owning a home one day (maybe), or retiring (maybe). You can exist, but it was all but impossible to change your life.
I make $43,000 a year. My goal is $2000 for a regular emergency fund. $6000 for a 3 month emergency fund. That would be $8000 set aside in my regular savings. (I'm currently at $1200 but I am able to set aside quite a bit per month. Around $500) After I reach that goal, I will move on to investing that money into increasing my $01k contributions.
The best decision I ever made in my life was investing in financial market. Trus me guys, it pays a lot . And I have come to realize that trading bitcoin is more profitable than holding it and waiting for it to skyrocket.
I love that you acknowledge the reasonable steps most viewers are already taking and mega-love the suggestion for a LOW stress side hustle! Sustainable budget changes for the win!
As a student who is living off of a bulk sum for the next year is there a good way of adapting the emergency fund concept? Or just budgeting in general.
Make a monthly budget with the money you have and see how much you can set aside for an emergency fund. Like Chelsea said in the video, see what vice or entertainment you can do without and save the money. It doesn’t have to be a lot; saving $50 a month is better than $0.
as a student, I used to split my yearly budget into four phases; three semesters and summer. I would then divvy that amount up into monthly allowances. I'd /then/ divide /that/ and give myself a weekly budget. and then I'd look at the number and think; well, I need £200 for rent, and £20 for groceries, and £30 for socialising and 'fun money', which was hobbies and coffee dates and nights out, but there's £15 in my weekly budget I technically have there I'm not spending. take that £15 out as a lump sum at the beginning of the semester, and put that money in a separate account. usually, if I was careful enough, I could skim a few hundred every semester off my bulk sum. I didn't call it an emergency fund back then, but that's exactly what it was. it wasn't huge amounts of money but it was all I could afford and I did it every time, and I boosted it with birthday and christmas money, and summer jobs money as well (get thee a summer job every year if you can, it's a game changer). some semesters I had to take money out (for emergencies), but it all added up, and by the time I completed my degree I had enough money to cover studying my masters degree for another year. this is just my experience as a UK university student, and I know that's not the same as the US, but getting started no matter how small matters, even if you just put summer money away, or get a part time job, or manage your own budget enough that you can see where you could save when you get the opportunity to.
@@GingerGenower I like that you chopped it down to size cause the 1-year part really made me go 😳. Even though I have X-years planned ahead I still balk at the idea of planning ahead 😅.
I'm not from the US, but I am a student; I use 2 different bank accounts. My first gets my paycheck and student loans, and I use it to pay rent, utilities, gym membership etc. The other is a (largely online) revolut account which I transfer £60/week into for food, clothes... basically any recreational spending. I get a notification on my phone whenever I spend something and can check what I have on the account really easily so I don't go over.
I save $500 a month. By the end of the year I have $6,000 which I use to maximize my Roth IRA in January. Before I did that I did it to build my emergency fund. It can be done.
