I'm doing a modified version of the Dave Ramsey baby steps (more closely following his predecessor, Crown Financial's Money Map), where I've been building sinking funds, the emergency fund, and paying off debt at the same time. I'm single without kids, have only student loan debt (which should be paid off within a month), 6 month's worth of expenses in my emergency fund, and keep a one month cushion in my checking account. I contribute to my 401k enough to get my employer's full match, but no more.
I consider my "emergency fund" primarily as money set aside in case of a job loss (unlikely where I am now, but I'm a bit paranoid about it) and as a living expenses fund for when I pursue graduate school in a year or two. Although I could use it for other emergencies, I keep sinking funds for other sub-categories that may constitute an emergency.
My two biggest concerns are unexpected car expenses, and medical expenses. I have health insurance through work, but since I'm young and relatively healthy, I have the plan that has no month-to-month expense for me, but has a HUGE deductible if something did happen to me (I think it's $5,000, before the insurance kicks in a single penny). My car is two years old and shouldn't have any major repairs coming up soon, so I use the car fund for regular oil changes, etc. My insurance deductible is $500, though I may raise it to $1,000 to save some money there.
In this situation, do you add to sinking funds in perpetuity (perhaps reducing the monthly amount over time as the value of the fund grows), or do you have a cut-off balance for your funds? Should I just keep adding to my medical fund until it reaches my deductible amount, though that will take years and years? My car fund right now is just over $500, so if any accidents happened, I could pay the deductible. When do cars start requiring really expensive maintenance? I want to move on to other savings goals once my emergency fund reaches 12 months, but all the "what if"s keep popping into my mind and I want to keep adding to these sinking funds to have various levels of emergency coverage. WWYD?