What Your Emergency Fund Is For - Dave Ramsey Rant 

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 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.

$13K in my emergency fund so far. That's about 4 months of expenses. I'm trying for $20K by the end of 2020.

I can honestly say no one has able me to think about my finances like Dave

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.

My life is about to change because of Dave Ramsey’s advice. I was looking for something completely different on RU-vid 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.

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!

Bulk up those emergency funds during the virus when you can.

Found Dave Ramsey in the Spring when I dealt with an emergency , my place was completely destroyed. It got handled, but dealing with it made me realize I need to be prepared to take better care of myself

So true I was laid off from AT&T December first. I survived off my 401k. I now have learned to be prepared

I can’t thank this guy enough, wish I followed his programme sooner.

Well I have $430 in emergency funds in my Ally Bank so far ...

This is the best explanation of the practical value of an emergency fund that I have heard. Clear. Jargon-free. Logical. Thank you.

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!

On baby step #3 for my emergency fund and got some money tucked away. Feels good to be debt free!!!

The foundation analogy says it all. Once you build your foundation/emergency fund, it remains there while you build on top of it.

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.

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!

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.

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.

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

We had our baby e-fund... $1000. We had some car issues... $500bill... thankfully we were prepared.

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

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

Amen - thank you Dave. Just rebuilding my fund after I took a part of it to fix my car

Thanks, Dave. I can honestly say, I Understand now.👍

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

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.

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!!!!

Listening to Dave has changed the course of my life! I thank God for this man!!

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.

Just an incredible explanation of emergency fund

Emergency funds are being used now.

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.

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

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

I needed to hear this. Thank you, Jordan from California, for asking!

building my emergency fund starting friday :) march 10 starting with $0.

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.

A question you DONT wanna ask in an emergency "Where da money at??"

Thanks Dave, AC just broke. paying $3500 cash to replace thanks to our emergency fund.

I just fulfilled my emergency fund! On to Step 3B👌🐝

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.

He should have a TV program !!!!!!

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. :)

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!

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 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

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 had a 6 month emergency fund before i started watching Dave because it makes me nervous for the reasons he just listed...

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!

Dave Ramsey you’re awesome

Thanks 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.

True . My other car broke down and luckily I had EFunds for it Instead of using credit card

Glad I found your channel Dave, gonna watch your videos cause I like lesrning about finances and saving money

2.24% savings account with Wealthfront! Beats what you can get at normal banks

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?

In India some banks give 6% on savings account

Thank you Dave !! You're awesome.

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

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.

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.

Wow best explanation ever .Thank you 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

Very well explained. Thanks Dave. 👍

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 soon as I saw the word ‘rant’ I knew I was hooked

Two thumbs up. This is a really helpful perspective on my emergency fund.

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

I’m very glad I found this video. Just started baby step 2!

Thanks....needed to hear this.

I wish I would heard of you sooner paying off all my cards will never by new car again on payments lol

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.

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.

i bonds! They’re paying 9.62% right now.

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.

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.

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

Where should retired seniors put their emergency retirement fund example between 200k to 500 k?

Thank you. I needed to hear this.

Whats the rule for emergency fund size? 6 months of expenses?

Fantastic Dave. Just Fantastic.

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?

Insurance of 3 years is worth it for me…

Thanks for explaining this .

Ally Financial offers 2.20% for their savings account currently

Dave’s Emergency fund is probably a million dollar

You should have easy access to some of the money, say $1000, then if you want a better interest rate maybe ladder the rest of the money in CD's for your 6 month expenses, allowing you only the money needed for that months bills.

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.)

THIS was so helpful

Will people on SSDI get in trouble for having $1,000 in the bank for emergency funds

i put my emergency fund into an index etf.

Emergency fund should be 6 times your monthly income like at least 12,000

i would keep it in cash in a safe place or easily to access.

So wasn’t the point of the question really about how to beet inflation? Sure... 1% interest in one year on $10,000 is only $100, but over 20 years it can be substantially more than that.

I’ve been annoyed by this as well. My credit union is only giving me a quarter of a percent on my savings. While I agree with Dave about how it’s not suppose to be an investment it’s still stupid low. I have other investments but most of my savings are going to the bank as I have shorter term goals and don’t want to risk my hard earned money. Calling the bank now, can’t hurt to see my options.

So should I not put my 10k emergency fund in a ally bank 2.20% savings account?

Why is this man so angry?