Running the numbers got thinking that just cutting out all the "extras" in an emergency may not be possible, and one should try to be as realistic as possible.
For example:
Eating out
if you are spending hours in a hospital every day with a loved one, your will eat out. You'll be exhausted, sleep deprived and worried and planning meals may be the last thing on your mind.
Having lunch with a group of friends who can be a job lead is another example.
so setting this expense to $0 may not be realistic
Grooming
If you are job hunting, getting haircuts is still necessary.
a freshly dry-cleaned suit as well.
Cable, data plan...
You know yourself, will you really cancel cable on day one in an event of an emergency? If not, it needs to be in there.
Realistic emergency fund
September 1st, 2011 at 05:17 pm
September 1st, 2011 at 06:58 pm 1314903501
However, if your emergency is due a hospital stay, car repair, or other unexpected expense. I could see cutting some of those things completely out or at least cutting back until they're paid.
September 1st, 2011 at 08:36 pm 1314909416
OK, I'm being silly. But that's how I calculate the money needed for MY emergency fund--if no one had any income at all, what's the bare minimum we could live on and not starve or lose our home or die of a curable disease?
So I took out internet (I could look for jobs at the library) but kept cell phones (I'd need it for emergencies re: my baby, and for fielding employment-related calls). I kept a small amount for grooming (would not want any of us to look disreputable when applying for jobs, and none of us knows how to cut hair). I added a big line item: health insurance. I cut student loans that could go into deferment, but kept the private ones. I kept bus passes because we don't have a car and would need them for getting around. (Though, could I cut them now that we have bikes? Interesting question. Probably not once we have another infant in the house; we'd need the bus to get him/her to the pediatrician.)
I doubt there would ever be a true emergency where all forms of income were immediately cut off. In a more realistic situation, we wouldn't all lose our jobs simultaneously, and those who did would have unemployment coming in, so obviously I wouldn't cut everything in the budget to the bone, just the more frivolous expenses such as housecleaning and travel. I would probably keep cable/internet; they're relatively cheap sources of information and forms of entertainment that would keep me from wanting to spend more money elsewhere. But for the purposes of calculating the EF, I figure out the bare minimum we'd need per month to survive with no income whatsoever. Then make sure I have at least 3x that set aside.