Milestone: I Completed My Emergency Fund

After paying off my personal loan and credit card debt early this year, the next item on my to-do list was to save for an emergency fund (EF).

Before I discuss how I came up with my target EF amount, here are details about myself for reference:

  • We are a dual income household with no kids. I’m in my late 30s and my husband is in his mid-40s.
  • My husband and I are both employees and we keep our finances separate.
  • My husband already completed his emergency fund — a year’s worth of household expenses.
  • I send a fixed amount of money to my parents every month as a gesture of gratitude. I considered setting up a separate emergency fund for them but my mom recently told me that after all these years they’ve been saving the money I’ve been giving them. My parents are frugal and they live off of their pension. They also have income from a small rental property.
  • We have HMO from the companies we work for.
  • We have a death/funeral plan.

I considered setting aside 6 months’ worth of expenses when the pandemic started, but since my husband already completed his EF, I thought I would keep mine at 3 months and start investing for my younger sibling’s college education instead. 3 months is just to cover things in case we/I couldn’t access my husband’s funds.

Here’s our household monthly expenses:

EXPENSE CATEGORYAMOUNT
Electricity3,000.00
Water200.00
Association Dues1,500.00
Drinking Water 250.00
Groceries (e.g., Food, Hygiene Products,
and Household Supplies)
10,000.00
Mortgage26,000.00
Globe Postpaid (Mine & Husband’s)1,598.00
Spotify (Family Plan)199.00
Netflix 549.00
Scribd (E-Books/Audiobooks)500.00
PLDT Broadband1,825.00
Money sent to family10,000.00
TOTALβ‚±55,621.00

Based on the expense breakdown above, 3 months’ worth of expenses is β‚± 166,863.00. However, if we actually find ourselves unemployed, I believe that amount could last us 5 months. My husband and I joined the workforce earning minimum wage and I’m confident we could scale back if needed.

β‚± 50,000.00 of my emergency fund is in CIMB Bank. I’m taking advantage of their 3.1% per annum interest rate. The rest is in a regular BDO savings account.

This is my first time setting up an emergency fund. Please let me know if there’s something I should consider. Also, where do you park yours?

14 thoughts on “Milestone: I Completed My Emergency Fund”

  1. I think it’s great that you and your husband didn’t succumb to lifestyle inflation and can still live comfortably on minimum wage even if you already earn more than that.

    Another thing I smiled at when I saw your list was the item for Scribd. I used to subscribe to that too and would listen to audiobooks during my commute. It really made the commute to and from work bearable and it reignited my love for fiction since I could just choose any book I want without worrying about the cost, unlike with tree-based books where you’ll have to be more circumspect in buying because sayang ang pera if the book turns out to be a dud. I stopped my subscription when the lockdown happened because I had no more office commute. I miss Scribd.

    For your EF, I suggest parking it in BPI Save Up or any other savings account with an insurance component so you can take advantage of the free life insurance match.

    1. Hello Jill!

      Re: lifestyle inflation, I wish that were true. We don’t have a car and we don’t upgrade our phones frequently BUT we used to eat out a lot (2 to 3x a week). Until this year, we were always on the hunt for new restaurants/food to try. When we travel, we also don’t deprive ourselves of food and conveniences. I don’t have regrets. πŸ˜… But when this pandemic/quarantine is over, we hope we can continue to keep our expenses low.

  2. Hi Che, congrats on achieving your milestone! Slowly but surely I know you will accomplish your financial goals in the future. Little sacrifices now will be fruitful in the future! I like that you also plan ahead and save an amount for the education of your sibling.

  3. Hi Che, congrats on the emergency fund. A simple but necessary step that most people don’t bother doing. I think the 3.1% interest from CIMB is okay. Right now our emergency funds are parked in plain savings accounts and just recently the BPI Save Up as mentioned by Jill.

    1. Thank you Mr. Triple P!

      I’m now looking into BPI Save Up, but I might need to hold off opening an account. I have a regular savings account with BPI, but I don’t know yet if they allow opening another account in my name without going to the bank. We don’t have a car and we’re trying as much as we can to stay home.

  4. Congratulations, Che! And thank you very much for the breakdown. πŸ™‚ One of my worries about the future is how much more I’ll be spending once I have my own family…whelp! Gotta prepare some more, it looks like.

    I also have P50k in Gcash for my emergency funds. I’m currently exploring ING however, because of the cash-in convenience fee and lower interest rate of GSave.

    1. I don’t remember getting charged for cashing-in on the GCash app 😱 I should check! I linked my BPI.

      Also, yeah. Now that we’re all on quarantine, there’s more time to think about stuff. Imagine the lifestyle you’ll have with future husband/family. I think our expenses is relatively low because we decided not to buy a car. Our place is also small, so less energy consumption.

      1. This is…low? Oh jeez. Maybe I should just not get married and live with my mom forever, haha. (Kidding but honestly worried now. Both my boyfriend and I don’t make much.)

        The convenience fee is only for Bank Card cash-ins (VISA/Mastercard) and BPI is one of those banks you can link your account to get around the convenience fee. I wrote a blog post about it here: https://natstartsat30.wordpress.com/2020/06/28/gcash-to-charge-2-58-convenience-fee-for-bank-card-cash-in-beginning-july-6-2020/

        1. You can bring down your monthly cash outflow if you pay for your future house in full (when you buy a house) or put in at least 50% downpayment. I only paid 20% dp when I bought our condo πŸ˜” Renting is also an option and definitely cheaper if you live outside the city and if you can find a way to work from home. I would add around β‚±2,000/month if we’re asked to go back to the office.

          P.S. Thank you for linking the gcash essay. πŸ™

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  6. I love this post. I’ll have to do this myself since my husband and I don’t have an EF. We do have an auto deduct from our payroll but having a breakdown like this looks would be more ideal.

    1. Initially, I was just going to set a fixed account (β‚±100k) but I’m glad I did it based on x number of months of expenses. It gave me a feeling of assurance that if my husband and I both lose our jobs we’re good for a couple of months.

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