3. Create a full-fledged Emergency Fund containing 3 to 6 months' worth of expenses.
While I'm a strong proponent of most of what Ramsey has to say, I personally haven't followed his "Baby Steps" plan (not strictly, anyway) in my own life. At the moment, though, I'm devoting my energy to my equivalent of this "Emergency Fund" step.
Here's what I'm looking to accomplish:
1) $12,000 in a dedicated, stand-alone Emergency Fund at ING Direct.
2) $500 cushion in our Electric Orange checking account (from which we pay all bills).
3) $2,500 cushion in my wife's checking/savings account.
Once achieved, this will give our household balance sheet a "liquid savings" total of $15,000. It would cover roughly four months' worth of expenses for our household.
All of this, of course, is in addition to our Freedom account, in which we save for irregular (but expected!) expenses.
Labels: Dave Ramsey, Saving
