Comments on: How I’m Creating an Emergency Fund with One Year of Income http://www.scotthyoung.com/blog/2009/03/25/how-i%e2%80%99m-creating-an-emergency-fund-with-one-year-of-income/ Thu, 09 Feb 2012 15:53:39 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: Finanzas Personales http://www.scotthyoung.com/blog/2009/03/25/how-i%e2%80%99m-creating-an-emergency-fund-with-one-year-of-income/comment-page-1/#comment-466324 Finanzas Personales Fri, 10 Sep 2010 02:25:42 +0000 http://www.scotthyoung.com/blog/2009/03/25/how-i%e2%80%99m-creating-an-emergency-fund-with-one-year-of-income/#comment-466324 Scott, one good approach is to replace some kind of loan payment with a new savings habit. I used to have a $250 a month loan and ever since I finished paying it, I continued extracting first this amount from my income, but this time to start an accumulation account. A second income can also be of great help in this sense. The one thing I find particularly good about your approach is that your objective is clear... in fact, I think it couldn't be clearer. That, for me, generates all the motivation and drive you need to make it. Good luck and congratulations!!! Scott,
one good approach is to replace some kind of loan payment with a new savings habit. I used to have a $250 a month loan and ever since I finished paying it, I continued extracting first this amount from my income, but this time to start an accumulation account. A second income can also be of great help in this sense.
The one thing I find particularly good about your approach is that your objective is clear… in fact, I think it couldn’t be clearer. That, for me, generates all the motivation and drive you need to make it.
Good luck and congratulations!!!

]]> By: Scott H Young » Financial Freedom http://www.scotthyoung.com/blog/2009/03/25/how-i%e2%80%99m-creating-an-emergency-fund-with-one-year-of-income/comment-page-1/#comment-305644 Scott H Young » Financial Freedom Thu, 02 Apr 2009 17:00:39 +0000 http://www.scotthyoung.com/blog/2009/03/25/how-i%e2%80%99m-creating-an-emergency-fund-with-one-year-of-income/#comment-305644 [...] week, I touched on the topic of financial freedom. I wrote about my goal to build an emergency fund with a year’s worth of living expenses in [...] [...] week, I touched on the topic of financial freedom. I wrote about my goal to build an emergency fund with a year’s worth of living expenses in [...]

]]> By: Mark Foo | TheBigDreamer.com http://www.scotthyoung.com/blog/2009/03/25/how-i%e2%80%99m-creating-an-emergency-fund-with-one-year-of-income/comment-page-1/#comment-304214 Mark Foo | TheBigDreamer.com Mon, 30 Mar 2009 20:02:08 +0000 http://www.scotthyoung.com/blog/2009/03/25/how-i%e2%80%99m-creating-an-emergency-fund-with-one-year-of-income/#comment-304214 Hi Scott, You're so young yet you're so much more sensible than most people older than you. Creating an emergency fund or simply saving for the rainy days is such a common sense thing yet most people don't do it. I'm happy for you that you're starting it at such a young age. I may sound cruel but I do think the current crisis the whole world is going thru is good in a way that it forces people to wake up to the real world. Life will never be a constant bed of roses. We always need to be prudent and plan for the future even in good times. I hope people will take a lesson from this crisis and learn to manage their finances better in the future. However, creating an emergency fund is just part of the equation. We need to do more than that. We need to create a proper financial management system so that we're more thoroughly prepared and in control. One of the ways I find very effective in controlling my finances is to set up different accounts for different purposes, which, setting aside an emergency fund is of cos' one of them. I've written a pretty detailed article on how I do that and if you're interested to find out more, you can go: <a href="http://www.thebigdreamer.com/a-practical-system-to-managing-your-money" rel="nofollow">A Practical System To Managing Your Money</a> While you're there, I hope you enjoy the read. Cheers~ Mark Hi Scott,

You’re so young yet you’re so much more sensible than most people older than you. Creating an emergency fund or simply saving for the rainy days is such a common sense thing yet most people don’t do it. I’m happy for you that you’re starting it at such a young age.

I may sound cruel but I do think the current crisis the whole world is going thru is good in a way that it forces people to wake up to the real world. Life will never be a constant bed of roses. We always need to be prudent and plan for the future even in good times. I hope people will take a lesson from this crisis and learn to manage their finances better in the future.

However, creating an emergency fund is just part of the equation. We need to do more than that. We need to create a proper financial management system so that we’re more thoroughly prepared and in control.

One of the ways I find very effective in controlling my finances is to set up different accounts for different purposes, which, setting aside an emergency fund is of cos’ one of them.

I’ve written a pretty detailed article on how I do that and if you’re interested to find out more, you can go:

A Practical System To Managing Your Money

While you’re there, I hope you enjoy the read.

Cheers~

Mark

]]> By: Loren http://www.scotthyoung.com/blog/2009/03/25/how-i%e2%80%99m-creating-an-emergency-fund-with-one-year-of-income/comment-page-1/#comment-303891 Loren Mon, 30 Mar 2009 04:07:48 +0000 http://www.scotthyoung.com/blog/2009/03/25/how-i%e2%80%99m-creating-an-emergency-fund-with-one-year-of-income/#comment-303891 Good Post Scott! About 4 years ago, when my wife and I got our tax refund, we started doing this. Normally, every year we'd get back a lump sum of money and spend it within a few weeks. But, we were living in a city far way from our families and with no one to lean on for help, we decided to just open an account and "leave it alone for a while". Well, for the very first time, we had money in the bank. After a few weeks it started to sink in. We had no more worries if the check would clear in time for the rent or bills. If we wanted to go out to eat, we could. After we moved back home, we started it again, except this time we cut all of our expenses down as low as we could by doing a few things: 1. Unplugging most of our electric items (cutting the bill down 35%) 2. Calling our cable/phone/internet/car insurance and negotiating better rates 3. Paying off our car loan ASAP With all of the EXTRA money, we started having that AUTOMATICLY put into a separate savings account that wasn't too convenient to get to. We weren't really missing the money because it was always going out, but now it as going out to us! If you have debt, pay the minimums on ALL but the smallest. If you focus on eliminating the smallest, then the next smallest, soon (year or two) you will have no debt and can do what Scott is doing. It gives you a completely different feeling when you have money in the bank and aren't stressing over job security, holiday gifts or even vacations. I will never go back to paycheck to paycheck again. Keep up the good work Scott!! Good Post Scott! About 4 years ago, when my wife and I got our tax refund, we started doing this. Normally, every year we’d get back a lump sum of money and spend it within a few weeks. But, we were living in a city far way from our families and with no one to lean on for help, we decided to just open an account and “leave it alone for a while”. Well, for the very first time, we had money in the bank. After a few weeks it started to sink in.
We had no more worries if the check would clear in time for the rent or bills. If we wanted to go out to eat, we could. After we moved back home, we started it again, except this time we cut all of our expenses down as low as we could by doing a few things:
1. Unplugging most of our electric items (cutting the bill down 35%)
2. Calling our cable/phone/internet/car insurance and negotiating better rates
3. Paying off our car loan ASAP
With all of the EXTRA money, we started having that AUTOMATICLY put into a separate savings account that wasn’t too convenient to get to.
We weren’t really missing the money because it was always going out, but now it as going out to us!
If you have debt, pay the minimums on ALL but the smallest. If you focus on eliminating the smallest, then the next smallest, soon (year or two) you will have no debt and can do what Scott is doing. It gives you a completely different feeling when you have money in the bank and aren’t stressing over job security, holiday gifts or even vacations. I will never go back to paycheck to paycheck again. Keep up the good work Scott!!

]]> By: Steve http://www.scotthyoung.com/blog/2009/03/25/how-i%e2%80%99m-creating-an-emergency-fund-with-one-year-of-income/comment-page-1/#comment-302960 Steve Fri, 27 Mar 2009 19:13:56 +0000 http://www.scotthyoung.com/blog/2009/03/25/how-i%e2%80%99m-creating-an-emergency-fund-with-one-year-of-income/#comment-302960 That's definitely a good idea! It will take time, but I have a goal to create even more than that in my emergency savings account. I guess the best place to start is with a series of milestones, one month, then three months, then six months, then nine, then one year, and so on... That’s definitely a good idea! It will take time, but I have a goal to create even more than that in my emergency savings account. I guess the best place to start is with a series of milestones, one month, then three months, then six months, then nine, then one year, and so on…

]]> By: Scott Young http://www.scotthyoung.com/blog/2009/03/25/how-i%e2%80%99m-creating-an-emergency-fund-with-one-year-of-income/comment-page-1/#comment-302915 Scott Young Fri, 27 Mar 2009 14:41:01 +0000 http://www.scotthyoung.com/blog/2009/03/25/how-i%e2%80%99m-creating-an-emergency-fund-with-one-year-of-income/#comment-302915 Kris, No offense taken. But I go to a public, Canadian university. If you compare my current expenses to someone in a private American university, the living expenses are quite different. Conn, Good luck! -Scott Kris,

No offense taken. But I go to a public, Canadian university. If you compare my current expenses to someone in a private American university, the living expenses are quite different.

Conn,

Good luck!

-Scott

]]> By: Kris http://www.scotthyoung.com/blog/2009/03/25/how-i%e2%80%99m-creating-an-emergency-fund-with-one-year-of-income/comment-page-1/#comment-302566 Kris Thu, 26 Mar 2009 19:49:30 +0000 http://www.scotthyoung.com/blog/2009/03/25/how-i%e2%80%99m-creating-an-emergency-fund-with-one-year-of-income/#comment-302566 Oh, wow, I didn't realize that sounded so anti-Canadian colleges. I just meant that it's something to consider when you decide where to go to college, or what your expenses are. Oh, wow, I didn’t realize that sounded so anti-Canadian colleges. I just meant that it’s something to consider when you decide where to go to college, or what your expenses are.

]]> By: Conn http://www.scotthyoung.com/blog/2009/03/25/how-i%e2%80%99m-creating-an-emergency-fund-with-one-year-of-income/comment-page-1/#comment-302494 Conn Thu, 26 Mar 2009 15:37:38 +0000 http://www.scotthyoung.com/blog/2009/03/25/how-i%e2%80%99m-creating-an-emergency-fund-with-one-year-of-income/#comment-302494 Financial freedom is my goal too. But my way to reach this is harder than yours, because I have to start with debt elimination. I hope I’ll get rid of debt this summer. Success! Financial freedom is my goal too. But my way to reach this is harder than yours, because I have to start with debt elimination. I hope I’ll get rid of debt this summer. Success!

]]> By: Scott Young http://www.scotthyoung.com/blog/2009/03/25/how-i%e2%80%99m-creating-an-emergency-fund-with-one-year-of-income/comment-page-1/#comment-302488 Scott Young Thu, 26 Mar 2009 15:19:38 +0000 http://www.scotthyoung.com/blog/2009/03/25/how-i%e2%80%99m-creating-an-emergency-fund-with-one-year-of-income/#comment-302488 Kris, That's completely true. I have friends in the United States that pay $30,000+ per year for college. Also, I live in Winnipeg, which is probably one of the cheapest cities in Canada to live in. David, Ah, you're completely correct. The purpose of the fund is that you can go without earning income for a year without any noticeable impact on your lifestyle--or going into debt. Focusing on expenses is a better route, agreed. Vlad, Saving isn't easy. Especially if money is tight. But, even if the period of time you need to reach the goal is long, you can still work towards it. Kris,

That’s completely true. I have friends in the United States that pay $30,000+ per year for college.

Also, I live in Winnipeg, which is probably one of the cheapest cities in Canada to live in.

David,

Ah, you’re completely correct. The purpose of the fund is that you can go without earning income for a year without any noticeable impact on your lifestyle–or going into debt. Focusing on expenses is a better route, agreed.

Vlad,

Saving isn’t easy. Especially if money is tight. But, even if the period of time you need to reach the goal is long, you can still work towards it.

]]> By: Kris http://www.scotthyoung.com/blog/2009/03/25/how-i%e2%80%99m-creating-an-emergency-fund-with-one-year-of-income/comment-page-1/#comment-302077 Kris Wed, 25 Mar 2009 21:58:46 +0000 http://www.scotthyoung.com/blog/2009/03/25/how-i%e2%80%99m-creating-an-emergency-fund-with-one-year-of-income/#comment-302077 And one way that you have such small expenses is that you go to school in Canada. And one way that you have such small expenses is that you go to school in Canada.

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