How much of an emergency fund do I really need? Right now I have about 10,000 and it feels like too much. It seems like more of it should be earning more interest.

We don’t own a car.
We rent.
We are fully insured.
We can live easily on either mine or my husband’s income.
We are freelancers, so if one of us was for some reason unable to work, the other could just pick up more work.
I can’t even think of a reason why the emergency fund would need to be used ever. Couldn’t it be $5000 or am I being terribly naive?

Right now I live in a 1000 sq. ft. double wide trailer that is 46 years old, at least. I could do with less space, but this is debt free and it has been updated in the last 8-10 years with a new steel & insulated roof, all double paned windows, a side wall on my carport and insulated siding. My total utilities, except for phone & internet run me about $160 a month. And that is in MO which has extremes in summer and winter.

I also lived for 15 years in a room with adjoining bath that was probably 100 sq ft at the most and for that 15 years I only paid $100 a month in rent and no utilities. This was in our capital city. Everyone was surprised I got a place so cheaply. Most paid $250 and up and up.

But – I am much older and do not need much space. My husband died in 2007 and I had way too much stuff. I am slowly going through it all and giving it away. My kids have told me the few things they want and I am saving those.

I have 3 bedrooms, but they have different uses now. One bedroom, one office/library and one storage room for food/supplies. I even have all my food on shelving with use by dates – one for 2011, one for 2012 and one for 2013 and beyond.

Many banks increase interest rates as your balance increases. For the sake of an example, let’s say anything up to $5,000 may earn 0.5%, 0.75% up to $10,000, 1% above that, and so on.

If they split the accounts, it will take twice as long to reach the higher rate levels as when they’ve saved $5,001 (total) it will be split in two accounts earning 0.5% instead of one account now earning 0.75%.

Saved separately, it would take twice as long to reach the higher interest rates.

But 320 sq ft? To raise a family, that’d be tough.

Q3 – if you’re going strictly by the numbers, and since you mentioned a Roth, there can actually be a *disadvantage* to being married. The cutoff for full Roth eligibility for a single filer in 2011 is $107K. You would then think that the full contribution cutoff for married filing jointly would be $214K but it’s actually only $169K. Additionally, the phase-out range (for partial contributions) for a single filer is $15K (so, up to $122K) but for MFJ it’s only a $10K range (up to $179K). This is a sore spot for me personally because my husband and I will only have a few more years of Roth eligibility.

Are you going to fix the poem reference for “O Captain?” The poet is Whitman, not Frost.

You should consider doing more fact checking.

AnnJo #38, Thank you for that splendid idea about a cheap cell phone, I’m going to get one of these! Thank you also for another reason why Walmart is good for poor (or thrifty) folks. Add that to Walmart’s dirt cheap drug plan for seniors on Medicare (cheaper than any other plan on the market), bargain groceries, (I hear in some places) bargain gas, walk in medical clinics at budget friendly prices, new, inexpensive goods for poor people, and you illustrate the good Walmart does for the financially challenged.

Personally, I would never live in the U.S. due to their health care system. I have a friend in Minnesota who is fighting terminal cancer, and the gov’t just garnished his disability, leaving him with practically nothing. Whereas here in Vancouver, I’ve had 2 surgeries in the last year, waited 1 month for one, 1 week for the other, had top-notch facilities and doctors, and didn’t pay a dime. There are many good things about the U.S., but IMO none of them are worth the risk of bankruptcy or worse due to unaffordable/inaccessible health care.

I bought a cell phone for $50 at Costco almost three years ago, loaded it with 1000 minutes for $100, and renew my remaining minutes with an annual purchase of 100-300 minutes for $10 – $25. The monthly cost works out to about $5 including the cost of the phone. It is more than adequate for what I need (and also has a camera, voice mail, good coverage in my area, etc.), since I do most of my phoning on land lines. I think I still have over 700 minutes on it, and on the next anniversary date will spend $10 to renew them for another year.

I’m amazed at the amount of money people spend on their cell phone plans (including me before I saw the light). Granted some people truly benefit because of their work (realtors come to mind and others who work on the road) but is it worth $60-100 a month to be able to call home from the grocery store to see if you need more milk?