Poll: size of your emergency fund

How large do you keep your emergency fund?

  • I do not have any. I rely on margin loans at IBKR or similar.
  • I do not have any. My job is very stable and I can cover unexpected expenses by not saving for a month.
  • 1 month of expenses
  • 3 months of expenses
  • 6 months of expenses
  • 9 months of expenses
  • One year of expenses
  • More than a year of expenses

0 voters

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Voted for 1 month of expenses but I’m actually holding a fixed amount of CHF 1000 + EUR 500 (single, good health, no dependants). Bigger needs would be fulfilled by, in that order: available cashflow, digging into debt, relying on family, friends and other supports from my social network, selling assets.

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Depends on your definition of an emergency fund:

20 CHF on my current account - a day or two’s worth of food? (I even had to dip into it, this month).

A credit card?

For yearly expenses, I have a standing order that transfers 1/12 of the budgeted yearly total to (kind of) a savings account each month. As I’m paying my health insurance at the end of the year and into my 3rd pillar at the beginning of the next year, this “savings” account will fill up over the course of the year. Strictly speaking these funds are budgeted, so not an emergency fund, I suppose? But I could postpone my third pillar contribution if anything unexpected came up.

If, on the other hand, something happened in January or February, right after I emptied that account, I may be screwed? :sweat_smile:

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Delay the 3a contributions to around june so that there’s always something in that account? That is, if you expect to rely on these funds in case of emergency, of course.

I got about 4 months expenses (8kchf) on my BCGE saving.
It is not fully accurate as I got also 30keuro to cover any improvements or emergency fix to perform on my French rental flat. This is for my piece of mind.

I have actually around CHF 25K (~8 months of expenses), so I opted for 6 months in the poll.

My EF will grow cause I am anticipating for a car change in the next few months (actual one is getting old; my strategy is to buy the new car “cash” when cost for maintenance exceed the residual value of the car).

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Currently no cash EF at all. IBKR margin and 10k limit on my credit card if anything serious comes up.

But I’ll probably rebuild it in Q1 2023, 10k (2 monthly expenses) should be enough.

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Shouldn’t this be a separate pot? A new car is not an emergency, or at least I wouldn’t classify it as an emergency.

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You are probably right, but I won’t create another 20-30K pot with money sleeping in a bank account waiting to be used. In any urgent case, I can use my Credit Card and/or IBKR loan.

Where I live, I consider car as a total necessity because offer for commutes are not frequent and car rental is not an option.

If you plan for a major expense in the coming month this is not part of your emergency fond even if you keep them in the same account.
Your emergency fond has still the same amount.

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It doesn’t need to be a separate account, I mean it doesn’t matter whether you have 2 small pots or one large pot. Personally I just wouldn’t mix up emergency funds and other savings.

A necessity is not an emergency.

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Not sure between “I don’t have any” and “More than a year of expenses”.

I don’t have a dedicated emergency fund, but I do have enough cash to cover about 4 years at the moment.

I don’t want any more equity exposure, in order to sleep well at night. 2nd and 3rd pillars are well funded, and also hesitant to commit to real estate investment at this point, so it’s just lying around waiting for bond yields to rise a bit more, or some life circumstances to change.

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I do use cash to rebalance into stocks. I meant that I don’t want to increase my stock percentage.
So, it is a part of the asset allocation, not an emergency fund, I guess.
It’s just that I have a relatively high cash allocation (much more than 5%) in absence of high CHF bond yields during previous many years.
Which is bond market timing, I agree.

You are both right, I mix up my saving account and my EF. My EF = my savings. All the rest goes to IBKR.
I should definitely split the two account so I can track precisely the saving part from the EF, and so the EF stay for what it is supposed to be :slightly_smiling_face:.

And yes, car is an absolute must, but right it is not vital. Thanks guys for correcting me ! Glad to be part of this caring community :smiley:!

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1 months unexpected expenses covered (5K). Out of this 5K, 2K is cash and 3K is withdrawal (if needed) using Revolut (top-up, send to bank acct. and then withdraw).

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Too much cash, almost a year of expenses but I’m looking for a job and the I abandoned the dreamland Switzerland for love (Vienna now)… sad :frowning:

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You are making good points in terms of splitting emergency funds from saving goals. I use separate “saving” accounts for vacations, son’s uni (next year), car. Those are easy to open and freaking painful to get money out (which is a plus).
But I also have my “dry powder” for investing in one of those. Can you expand a little about why you keep investment money directly in IBKR? (I use Cornèrtrader). And someone here mentioned IBKR loan, any links to more info how that works?
Thanks.

That are so called margin loans or “Lombardkredit” in German. You borrow money with your securities as collateral.
The interest rates are really low currently (1.5% up to CHF 90k). As usual when leverage is involved, you should use it with caution.

I use margin loans as an emergency fund to reduce the opportunity costs of holding lots of cash. Then I’d repay the loan in the next 3-4 months with my monthly savings. I recently tested it to pay my taxes (not an emergency) with a margin loan.

There’s a thread here:

and some more info about how it works from IBKR here:

And cornertrader:

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