Lolol my editors really wanted to start some beef, didn’t they? 😉 don’t worry ya’ll, I know he knows it’s not enough lol and the baby steps have helped millions of people. Naughty editors, naughty.
I personally like the money guy FOO, making sure you have enough for your largest deductible as the first step.
It’s things like this that make me quest Caleb’s knowledge… $1000 is the starter. It’s there for while you’re getting out of debt. Once out of debt, you finish the emergency fund by making it 3-6 a worth of expenses.
I’ve seen a variety of takes on how much liquid cash to set aside—
Most Common: 4-6 Months of expenses.
Interesting Take: Average length of market downturn is 3 years, so maintain 3 years of expenses in cash if you’re living off of an asset portfolio.
My Take: Minimum should be the largest emergency you’ve ever had to cover, plus 6 Months of expenses. I do like the 3 year take for a long-run view though, but I wouldn’t keep that sidelined in the early stages of compounding.
The average emergency costs 1.7k (the range given is 1-3.4k). So advocating a $1k emergency fund as the “minimum” is just mathematically irresponsible.
The minimum should be at least the average, not the lower band. Even then— you could have your first 5 figure emergency pop up, and $1k isn’t covering that.
There’s always a healthy debate around the right emergency fund amount. The biggest lesson is that having a plan in place matters more than waiting until something goes wrong.
Part of the learning curve for the 1K emergency fund is that lots of things people consider an emergency SHOULD be budgeted for. Your budget should include $$ for car maintenance (tires, shocks & such, not just gas, oil and insurance. ) Your budget should include home maintenance (roof, HVAC, appliances). A busted fridge should not be an emergency because one of those appliances could fail at any time,
People need to learn to budget for maintenance and stop feeling like an aging item that breaks is the universe striking out against them.
Right but Dave is open about the fact that the $1,000 isn't about its functional value. It's about the psychology of it. It's a small, achievable goal that can get the ball rolling. Without that, whatever form that goal takes, many people will give up.
The thing is, stacking aside 1k gets you out of the mindset that you don't have to burn your income to 0 each month. Sure it's not enough, but it's definitely a start with a mindset shift.
I had 7,700 in auto repairs (truck and car) this past six months alone. I heard a video like five years ago that Dave Ramsey did that says if you own a home single your emergency fund should be $10,000 for home repairs. You may want to research that I can’t find it again.
Lolol my editors really wanted to start some beef, didn’t they? 😉 don’t worry ya’ll, I know he knows it’s not enough lol and the baby steps have helped millions of people. Naughty editors, naughty.
I personally like the money guy FOO, making sure you have enough for your largest deductible as the first step.
It’s things like this that make me quest Caleb’s knowledge…
$1000 is the starter. It’s there for while you’re getting out of debt. Once out of debt, you finish the emergency fund by making it 3-6 a worth of expenses.
I’ve seen a variety of takes on how much liquid cash to set aside—
Most Common: 4-6 Months of expenses.
Interesting Take: Average length of market downturn is 3 years, so maintain 3 years of expenses in cash if you’re living off of an asset portfolio.
My Take: Minimum should be the largest emergency you’ve ever had to cover, plus 6 Months of expenses. I do like the 3 year take for a long-run view though, but I wouldn’t keep that sidelined in the early stages of compounding.
The average emergency costs 1.7k (the range given is 1-3.4k). So advocating a $1k emergency fund as the “minimum” is just mathematically irresponsible.
The minimum should be at least the average, not the lower band. Even then— you could have your first 5 figure emergency pop up, and $1k isn’t covering that.
Yeah you need more then what he says just because is the raise of living,
1000$ is baby step 1 according to dave, you are supposed to grow it
It's true 1,000 is not enough. Budget is a great idea.
Well Dave Ramsey even tells you a thousand dollars isn’t enough for an emergency fund that’s not the purpose for the thousand.
That's why he is broke, and living under his mother's basement. ????
How did they do $1000 emergency fund and come out worse. As compared to a zero dollar emergency fund?
NO PROGRESS ????????????
its not supposed to be enough????
There’s always a healthy debate around the right emergency fund amount. The biggest lesson is that having a plan in place matters more than waiting until something goes wrong.
Part of the learning curve for the 1K emergency fund is that lots of things people consider an emergency SHOULD be budgeted for. Your budget should include $$ for car maintenance (tires, shocks & such, not just gas, oil and insurance. ) Your budget should include home maintenance (roof, HVAC, appliances). A busted fridge should not be an emergency because one of those appliances could fail at any time,
People need to learn to budget for maintenance and stop feeling like an aging item that breaks is the universe striking out against them.
Right but Dave is open about the fact that the $1,000 isn't about its functional value. It's about the psychology of it. It's a small, achievable goal that can get the ball rolling. Without that, whatever form that goal takes, many people will give up.
I think it’s reasonable to bump up the starter EF to one month of expenses, then attack your debt.
Dave Ramsey living rent free in so many haters heads ????
The advice is from the 36 years ago Radio Show!
The thing is, stacking aside 1k gets you out of the mindset that you don't have to burn your income to 0 each month. Sure it's not enough, but it's definitely a start with a mindset shift.
That’s why it’s a baby step. He explains that it’s not enough to cover everything but it’s better than zero
$1000 is just the start of an emergency fund.
You keep adding to that.
I love Dave Ramsey but I agree
great content
For the snowball effect, what’s the pattern to raise your credit score the fastest?
I was trying to watch an actual finance expert and instead found this video. So disappointed.
Rare Caleb hammer L look up the reason why Dave Ramsey has people start with 1k$ in a “emergency fund “
I had 7,700 in auto repairs (truck and car) this past six months alone.
I heard a video like five years ago that Dave Ramsey did that says if you own a home single your emergency fund should be $10,000 for home repairs. You may want to research that I can’t find it again.