My wife and I finally decided to work on putting an emergency fund together. It has been a challenge for us to make a decision on how much to set aside, so we have kept putting it off. Dave Ramsey suggests $1k, then to move on directly to debt, then increase EF to 3-6 months of expenses. Suze Orman on the other hand adamantly suggests having an 8 month emergency fund setup, before tackling debt. We need $2,600 to cover our basic monthly expenses so Suze says we need around $20k. I'm thinking when it comes to EF's, one size certainly doesn't fit all. That said, below are the concerns we considered:

1. Job security. If I were to lose my job and not find equivalent employment how would we pay our bills in the interim? Currently DW is not working, but is actively seeking employment.

2. Purpose. If the goal of having an EF is so you will not have to resort to borrowing money to cover life's unexpected expenses it only makes sense that the EF be large enough to cover those types of expenses.

3. Amount of Debt. We have $80k in student loan debt and $93k left on our mortgage. This $80k will take some years to get paid off; the mortgage will be paid off in 2018.

Taking this into account this is what we have come up with. Concern #1 is a non issue. Due to strange circumstances, if I somehow was let go from my company, I will actually receive a 50% pay increase and be immediately employed by another company. So #1 is a non-issue. Issue #2, I earn enough to bankroll a $1k emergency month to month. The emergency’s that would affect us would be much more expensive, like car death. Issue #3 we really want that debt gone, but it may be years before it can be completely paid off. We both feel like we should have some sort of EF while we are paying off the $80k.

In the end we decided that we would save a 6 month or $16k emergency fund, in 1k CD’s, before paying off our debt. This should allow us to pay cash every expense (loss) that we are not insured against.

At the beginning of April we have 1 CD (1/16) opened in December. So far this month we have been able to open 5 more CD’s (6/16). This is a three paycheck month for me so we will open 2 more CD’s (8/16) on Friday. Our tax return for this year is 5k, so for the first time ever we will be saving all of it. That will be 5 more CD’s (13/16) in the near future. Going into May I have $400 in overtime plus we have budgeted $1,100 for the EF. If I can make $500 in overtime in May we will be able to open our final 2 CD’s (16/16). So with any luck we will finally have a fully funded EF by June!!!