The 1-3-6 Method For Building & Managing Your Emergency Fund

In this episode of the Personal Finance Podcast, we're going to talk about the 1-3-6 method for building your emergency fund.

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[TinyVio-Lynn]

I’m on my way to building my emergency fund. My goal is 15k. I had 3100 in there and just this week I needed emergency vet care for my dog and a new water heater for my house. In total it cost met 2600. I’m so grateful I had that set aside or else I would’ve been screwed. And I felt proud I didn’t have to ask a family member to loan it to me. I’ve got to start over again but that’s what it was meant for.

[kents.]

I see so many of my midwest co workers complaining about being broke, no savings, etc. Yet I see them buying lunch, drinking multiple energy drinks, pack of cigarettes. So 15 bucks for lunch, 4 dollars per Monster, 14 dollars for a pack. 37 dollars a day. 93 dollars a week. $ 4, 386 a year!

[carolynevans]

So far on a very low income I've managed to save just over $3000.00 and brought a nutual and etf funds. Still climbing

[ParkDari]

When we married, we opened a tax efficient fund that we automatically deposited 50 bucks in every month that has been going on for 25 years. That is our emergency fund. We keep $2500 on hand for an immediate emergency because we can tap the fund in three business days And frankly there are very few emergencies that require more than $2500 or can’t wait for three business days. We finally tapped the account this year for a small emergency of around 7K. It was super convenient to just pay that medical bill with no effect on our budget. We aren’t going to change the structure. We will keep leaving it at the $50 a month to replenish itself. You can’t believe how well you sleep when you know you could lose your job and still be OK.

[TeddyAlexanderv]

Investments are the roots of financial security; the deeper they grow, the stronger your future will be."

[alexsteven.m]

Building wealth involves developing good habits like regularly putting money away in intervals for solid investments. Instead of trying to predict and prognosticate the stability of the market and precisely when the change is going to happen, a better strategy is simply having a portfolio that’s well prepared for any eventually, that’s how some folks' been averaging 150K every 7week these past 4months according to Bloomberg.

[carolynevans]

I know it's not much - but update on low income - I just hit my 4000.00 emgency fund. To make it not seem a mountain to climb especially on a low income is I set small amount of moneytary goals - e.g start to try and save 200.00 - 500.00 @ at time. It doesn't make it seem so impossible. Just an idea

[tzlj]

Well done! Watch the whole video viewers. I agree with his direction. I would only add, "save automatically, or you won't "

[the_cheese]

Place that emergency fund in a high yield savings account. Great advice! Thank you!

[karladenton]

I'm one of the people who needed to hear "use it". I've been knocked back to just a bit over six months due to some storm damage not covered by home owners insurance and I'm STRESSING about it. Not what I needed in my first few months of retirement! But I haven't had to touch investments at all yet.

[Daneilchirs]

Its worse here, our economy is like a flailing fish, fighting for its life. The normal state of the U.S. economy is actually very bad. Because of this it goes into convulsive spasms fighting to grow any way it can out of desperation. Tricks, gimmicks, rule changes try to stimulate the economy and prevent it from falling but they only bring temporary relief to people since, when you factor in inflation we are declining.

[Strawberryld]

This is by far my FAVORITE methodology on saving. I appreciate your clarification and reiteration of the main concept throughout the video as well as your clear explanation of how to cycle so the dollars are going where they need to go based on the need. Subscribing now and going back to watch other videos as I just found you today!!! THANK YOU!

[dreamchaser]

Thanks for doing such a deep dive into emergency funds, bedrock of personal finance.

[Tchp-lduz]

The thing that kills people is wasting money on Starbucks and eating out.

For my individual situation, I have a regular day job along with a few side hustles and dividend investment portfolio. My SWAN # is ~ 7.5 months. Already hit the 6 months in an hysa, contributing to a 401k w/ match, Roth IRA (voo + SCHD), health savings account.

But rather than increasing towards an “emergency fund” I am going to have a long term sink fund (for any big purchases or life events that are coming). Since a down payment on a house, setting aside cash for replacing a car, etc all needs to be in addition to the emergency fund. Paying cash for everything keeps you out of financial hell.

[nosirrahm]

My emergency fund (along with sinking funds) is separate from my income replacement fund. I don’t want to go through and emergency fund and have zero.

[brown]

Excited to watch this channel grow. You’re doing great work man. Keep it up!

[naturalbeauty]

I’m currently working on having 6 months saved I loved the video

[SimplyBlessedDesignz]

I have been following the same methods originally done by Dave Ramsey for years. It works.

[janegalicia]

Love your motivations coming from your first hand experiences. Worth listening!

[eyeofthetyger]

What about placing the 3 and 6 month emergency fund in treasuries and certificates of deposit? I know you can ladder treasuries so you can get money each week. Not sure how best to use Certificates as they do better if left alone for a year