When your Emergency Fund is finished...

[beansmama]

What are your plans?

When we finished our first 6-month emergency fund, we let ourselves splurge for pretty much an entire month. We kept it around $500 (what we would've put into savings)...but...sadly, eventually we blew through our entire emergency fund (nearly!) on non-emergencies (we were having some personal problems and stupidly figured "retail therapy" to the extreme, would help...), so we're back to square one, trying to finish it off...again!

We've been saving again and our 6 month emergency fund should be finished in September. I never thought about whether or not we would reward ourselves for our hard effort (it's gonna be TIGHT for this coming 6 months!) or if we'd immediately start saving for our home downpayment.

I was inspired to do a poll by another mama's post on splurging post-finishing the e-fund - I hadn't even thought about splurging being a "duh" option until yesterday, lol!

So? What do/will you do?

ETA: I picked we will splurge, but just a bit. I'm thinking a date with DH and a trip to the zoo for the kids, then it's back to saving. Well, actually, those things will cost about $100, which means we'll still be saving, just not as much. Anyway, then it's right back to the hardcoreness ;)

Edited by beansmama - 3/8/11 at 7:28am

[frugalmum]

Since a true financial emergency (i.e. job loss, loss of health insurance) could be very expensive we don't ever "finish" putting into the emergency fund-- whatever we can save we do save, so there's never an end point to it.  Even if we did have an exact sum in mind we wouldn't splurge-- we're very frugal!

[VisionaryMom]

We are moving next year, so everything goes into the emergency/moving fund until then. After we've moved our intention once we have six months of expenses saved up is to take a short weekend trip to somewhere within 3-4 hours. Depending on how frugally we do the move, we should have six months of expenses pretty quickly. I don't know how much the weekend will cost, but I'd say probably in the $500 range. We usually camp when we travel, but I *so* want to stay in a hotel for a weekend! 

[insidevoice]

We hope to continue to save, but our splurge will be to readjust a bit- $50 more to each of us for spending money- for instance... and $100 a month to the 'family fun' fund. It will not stop our ef/savings contributions, but it won't need to stay so hardcore and we can have fun. :)

[EmsMom]

I just finished my 3 month emergency fund.  So I splurged a little.  Now I will stop and go back towards the 12 month emergency fund.  Even after that I will still save quite a bit.  I really have nearly everything I could want/need.  Some travel might be nice, though.

[ilovemygirl]

A FFEF is like a dream to me right now. It's still at least a year away if not more but should it ever happen I'd like to finally take a little local vacation maybe over a long weekend or something so I voted for the splurging under $500 option.

[Denvergirlie]

My FFEF is complete, was complete almost 2 years ago, but then got drained due to a move, but it's full again.

I don't think we've splurged really at all, but did loosen the reigns a bit. Bought a used ATV , a want but a necessary one as were we live we now need a snowplow, but it is also a toy. Went on a road trip vacation to see family, etc. With the move, we also spend more now on gas, went from being able to walk almost everywhere, to being a 10 mile trip to the closest gas station/ fast food joint, etc.

I still put money into savings each month. During the get out of debt phase, I put some things off like maintance on the truck, but have started to invest back into that. New tires cost $910 in Novemeber, it needs new brakes too, spark plugs/ coil being changed tomorrow ($300), etc. It all adds up. 

During get out of debt and FFEF funding, I wsn't doing sinking funds, but have started that now, so pushing extra money towards specific savings accounts for car replacement, vacation, household repair, etc, etc.

Yes, having the FFEF is great, but I don't feel "secure" money wise still. Paid off house & land, healthy retirement account and knowledge that the dollar won't collaspe, then I might get crazy and splurge, splurge, spluge, but that's not going to happen for many years.

Although I love having the FFEF, I still don't consider to be well off or secure in any fashion. Yes, it's great having that money in the bank, but it's not a license to go hog wild as there are numerous other goals to still achive.

[kristandthekids]

The 6 months of living expenses I had saved got used up when I was laid off. Now I really wish I hadn't done so much splurging after I saved it and had thrown more of it at student loans. That would be such a huge weight off of me right now.

When I'm done saving it a second time I'm not going to splurge. I don't want anything to slow my roll.

[Narawen]

Originally Posted by Denvergirlie 

During get out of debt and FFEF funding, I wsn't doing sinking funds, but have started that now, so pushing extra money towards specific savings accounts for car replacement, vacation, household repair, etc, etc.

This. Since I'm following a modified Crown/DR plan, by the time I have a FFEF, my debt should be gone as well. Once I have my FFEF, I'll start directing that money towards other savings goals, which will include things like a newer car, and a long vacation. I doubt I'll splurge more than $100 immediately after completing my EF, but I'll want to go on a long vacation, which will probably take several more months to save for. 

[velochic]

I agree that there is no "end" to an emergency fund - it just depends on how you categorize it.  There is almost always something else to save for.  In your case, it's a home down payment.  You've already admitted that you blew through your last EF.  It might be a good idea to learn from that and not repeat the same action as a "reward", then end up having to start over yet once again.   Good luck!  ETA: I also wanted to mention that we have a high net worth, but we still don't "splurge" even though we could.  It's important to get away from the mindset that spending money is a "reward" for saving.  It isn't.  Having the financial security is the reward.

[beansmama]

Our blowing through our emergency fund had nothing to do with an initial splurge/reward/treat for finishing the fund. It had to do with HUGE personal issues that were totally unrelated, and I DID learn from them, for what it's worth ;) Since beginning to save again we're determined to not touch that e-fund unless it's an actual emergency :)

And as far as an "end" to the emergency fund - I'm talking the basic, recommended, 3-6 month a la DR-ish plans. I'm not talking about quitting saving altogether, I merely am wondering if and how you will "treat" yourself once you're done with this step, before moving on to the *next* step. In my financial goal life (lol) there is always a next step - college, retirement, paying off the mortgage completely, car, etc. etc.

This wasn't meant to be a deep question - just a fun one ;)

[LeighPF]

Short of a specific. I would blow whatever you usually save in an month for the EF on something fun and meaningful (don't just fritter it). The next month start putting that money into your new goal. 

[zinemama]

Wow, it would never occur to me to start splurging after getting the EF established! I would just reassign those savings to other things like retirement and college.

[MaryElizabeth]

It seems that even though we have a good emergency fund saved up, that there always seems to be something "extra" to pay for each month. Whether it be home maintenance, car maintenance, a birthday... family wedding... I could go on and on :) I think this is why I don't ever go "crazy" but I will say that I do have a liberal spending budget compared to others who are more tight laced with their monthly income. I always have some "project" that I am working on and therefore needing to accumulate things for  For instance, we are remodeling our house for resale in a few months AND having a new baby come June AND moving to a new post in August AND going on a family vacation (mostly paid for by inlaws--yay!) AND have my sisters wedding (out of state) in September. It seems as if we always will have something coming up that I need to prepare for and it will be nice to be settled and able to literally buy only the essentials for a few months! Trying to constantly find deals and regulate what I am spending on what is really making me stressed!!!! But... such is life

[BetsyS]

Well, we like to splurge in my house, so I voted splurge. 

My dh is commission based.  Just this week, he got his biggest comission check of the year (12 month year).  We totally splurged and went to Dairy Queen!  It was great, and he felt like it was a big reward for his hard work. 

Now, sure, we could go other times.  But, we like to tie our fun, very occasional stuff (like DQ) to celebrations.  Makes the day/person/event that much more special.

[GearGirl]

I think you are on to something with enjoying yourself for the one month, I would go with the full savings that month and go on a mini trip.  Then back to saving for a mortgage.  Good for you getting this far, that's wonderful.  I think going through bumps on the road like blowing an emergency fund once make us even more determined and we definitely learn from them.  

[pianojazzgirl]

I would probably treat myself to a little fun.  I probably wouldn't spend the full amount of the savings for that month though.  And then we'd get back to saving the next month.  (I guess that's pretty much what you're planning, right OP?).

[velochic]

Originally Posted by beansmama 

Our blowing through our emergency fund had nothing to do with an initial splurge/reward/treat for finishing the fund. It had to do with HUGE personal issues that were totally unrelated, and I DID learn from them, for what it's worth ;) Since beginning to save again we're determined to not touch that e-fund unless it's an actual emergency :)

And as far as an "end" to the emergency fund - I'm talking the basic, recommended, 3-6 month a la DR-ish plans. I'm not talking about quitting saving altogether, I merely am wondering if and how you will "treat" yourself once you're done with this step, before moving on to the *next* step. In my financial goal life (lol) there is always a next step - college, retirement, paying off the mortgage completely, car, etc. etc.

This wasn't meant to be a deep question - just a fun one ;)

I understand what you're saying, but since you are already used to saving the money, I would keep up the momentum.  Rather than just "blowing" a whole month's worth of EF savings, repurpose that money and include saving for the splurge.

So, what I'm saying is that if you have $500 that you usually put back for EF, and you are wanting to redirect that to other savings, do so, and include redirecting some of it to splurge.  So, put back $100 of it each month until you have a few hundred, then go wild.  Don't, for one month, just blow off saving money.

It's a "saving" rather than "spending" mentality and part of that is keeping up the saving momentum.  The reward is that you are able to do something fun, but it's planned and saved for.  I don't know if that makes sense.   It's something that works well for us, but everyone has different financial personalities, so it may not be valid advice for you.
 

[beansmama]

Oh yeah, I am not going to quit saving for an entire month - and I didn't say that I was, either.

I'll probably spend, like, I dunno - under $200. Fun trip with the kids (day trip to a zoo or something) and a date night w/ the hubby...one where we're not on such a tight budget! If we kept it to that, we'll still be socking away $400+ for the month :)

I know myself, and quitting saving for any length of time just isn't wise. It's too easy to fall in the spend thrift cycle. Besides, we're all (even the kids! well...not ds, he's one..haha, but dd!) to start saving for our first house :D

[JenRN]

I voted "other", because I just went through this, and am not sure if what I did could be considered a splurge or not.

We were trying to get pregnant, and having issues. I had a miscarriage, and thusly diagnosed with hormonal issues and wasn't sure if I could STAY pregnant without lots of help. We decided to keep funding our emergency fund (which had about 5 months of expenses in there). I thought I might need fertility treatments or something that our insurance wouldn't cover. Anything extra went into the emergency fund. It became a habit, and even after I had a successful pregnancy and a healthy baby, and the hospital bills were long paid off, we kept funding it.

Last month, when DD was 8 months old, we realized we OVER funded our emergency fund. By a lot. We both work, and decided 3-6 months was all we needed, and we had around 1 year in there. So we took money out and paid cash for a used van (DH's vehicle is 14 years old and about to die, and I was tired of trying to fit DD, all the stuff, and a husband and a dog into a tiny car for long trips).

That was an awesome feeling!!!