Monday, June 25, 2012

Rainy Day Fund

With Tropical Storm Debby swirling off the west coast of Florida it was a rainy weekend here in South Florida.

Speaking of rainy days, 3 out of 10 Americans  don't have any emergency savings.  Only 25% had the recommended six (6) months of expenses saved up, 21% had some money in emergency savings but not enough to cover three (3) months of expenses.

At present, we have $17,683 in our emergency account at ING and another $1000 in our Wells Fargo savings account (which is also part of our emergency account).  And, we have another $6000 in our primary home escrow savings account (we don't let the bank escrow for us, we do it ourselves) that we could tap in a real emergency.  Including the extra funds in our escrow account we have just over 6 months of basic living expenses (not including any expenses for our rental properties).  Not counting the extra escrow account monies, we have 4.5 months of basic living expenses.

We escrow for our property taxes and our home and wind storm insurance.  Each month, we have an auto transfer to our ING escrow account in an amount that covers 1/12 of the amount we need for these expenses.  However, when the bill comes in, I often try to pay part or all of the bill from money already available in our checking accounts rather than tap our ING escrow account.  As a result, we have extra money in our escrow account that we could tap if need be.  I sort of count that money as a house emergency fund, meaning if we had a house emergency we would tap that escrow account.  We will soon be tenting our home, termites, so that expense might be paid in part of full from the ING escrow accounts.

One of our goals for 2012 was to add another $10,000 to our emergency account, at present we have saved $4800 towards that goal and we are generally on target to meet that savings goal.  By the end of 2012, assuming we meet our goal, we will have $22,900 in our ING savings alone which will give us 5.5 months of basic expenses.

What say you, how much do you have saved for a rainy day?

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