Emergency funds don't need a special account... they just need to be set in place..

Most financial planners suggest that an emergency fund contain enough money to cover at least three months of living expenses. Note that financial institutions do not carry accounts labeled as emergency funds; it is up to the individual to set up this type of account.

agreed average_joe...
However in the past the chinese (in china) were reputed as being really good savers...

Obviously if they're trying to enjoy consumerism the way we do... their savings will probably decline...

Having said that... I'm not sure how much of a social net they have these days.

If I had no social net, I would REALLY be worried.

The people in china are changing. If you notice they want the same lifestyles as the Americans.

ISaveMoney...
Good to know you... we need people like you around here to encourage others..

I always think of the Chinese people.. (from China) they've been good savers.. because they don't have a social net. Even the people from Saskatchewan have always been conservative with their money and good savers, up until recently ...

You can never go wrong with having emergency funds in place. Thanks for your comments

the question is this:
do you have enough money in place to pay the bills so that you don't worry any more.. people worry about money

I have enough money in place that i don't worry any more. i guess i am a bit of a compulsive saver but i would rather save money than spend it

i don't believe in the intermediate fund theory. i think people should save emergency funds and then go straight to retirement funds. once you have retirement funds in place you can use them if the roof leaks etc.. the only thing is, you don't want to keep all of your retirement funds in rrsp's for tax purposes

people need to know the peace of mind that comes when you've got money saved up.. we should all be saving up like we used to before all of the government developed social nets were developed

agreed average_joe...
the question is this: if your fridge broke and you needed to pay for repairs, could you do that with cash? Are you able to cover any repairs of items in your household with cash?

If you were laid off for six months could you afford that?

After you have six months or so of emergency fund savings in place, the next step, IMO, is to save up intermediate funds.. intermediate funds are those for higher priced items like fixing the roof, buying a new washer dryer etc. These are items that would cost a few months salary ...

While you're saving up for intermediate expenses, it's important to be saving for retirement... ultimately this amount is based on your current lifestyle and how much you think you'll need in retirement.

To answer your question average_joe, after you've saved up intermediate funds, you should have enough if these were used for emergency funds...

Ex... I have enough saved up for emergency funds, intermediate funds and I'm working on my retirement savings now... I've got enough saved up to cover the family for a few years... this is a great feeling knowing that I'm covered

I have enough money to replace any or all items in the house...I can pay cash to do this.. You can imagine that I sleep well at night.!!! :)

Now all I have to do is complete my retirement savings program.

Monty,

What would be a good amount saved for six months of expenses? I think people should have at least a min of one year saved up.

I'm thinking of the situation where you've taken the time to save up adequate amount of emergency funds... you've got money in place to pay for 6 months of expenses...

Now what? What should you do with your money now that you've got your emergency funds in place?

Do you take the money you've been saving and start to spend it on all of those things you've wanted, or do you keep saving it for retirement?

What's your opinion?