24 responses to “Why you need an emergency fund”

  1. nina

    We are currently buiding our emergency fund. I opened a high yield saving account at 5.99% pa here in Qatar. It’s e-savings so no ATM, no cheque. Withdrawal can only be done via wire transfer. No holding period and no withdrawal limit so you can withdraw anytime. I believe this is a better deal than many deposit products.

  2. Celine

    Wow, I don’t see interest rates like that for savings accounts here in Manila. Meron din naman, pero not with major chain banks and usually with withdrawal limits or with high initial deposits (from what I’ve been researching, usually over P250,000). Eventually when I bulk up my emergency fund to that kind of amount, I’d love to get those rates for savings accounts or TDs. But for now, I can’t :(

  3. nina

    Medyo malaki din ang initial deposit if converted to peso. Pero for OFWs here, tamang-tama kasi instead of sending the dollars in the Phils, ipunin na lang sa e-savings. Meron din mga deposit product ang banks dito to jumpstart savings.

  4. kurt

    Rural banks are a good way of earning money…they give as much as 7 to 16% pa on time deposits. Of course, make sure you know what the risks are..but generally, money below 200k PhP should be safe cause it will be insured with the PDIC :D

    It’ll really be hard trying to convince Pinoys to have an emergency fund when there’s always something tempting enough for them to buy, be it a new cellphone or an upgrade on their car or whatnot. Plus Pinoys will always rely on their network of friends and family (“uuy pautang”) in times of dire need so they won’t see the point of breaking their backs to save for an emergency fund. But nice try Celine ;)

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  8. Bone MD

    This is such a nice post!And very helpful too!
    I’m also trying to “build up” my emergency fund and I wrote a mini guide here

    I’m still mulling over the “right ” bank account to hold it in. Like you said, it should be easily accessible but not to tempting and if possible with high interest rates. Have yet to see one here in PH.

  9. Celine

    Thanks! Especially for sharing your own guide. :)

  10. Bone MD

    Almost forgot Celine, I took the liberty of linking your FP site to my blog (without first asking your permission, yaiks!). It’s one very good and practical site I don’t want to miss reading your post since day one I stumbled on it!

    I hope you won’t mind.

    Thanks really.

  11. Celine

    I don’t mind, in fact, thanks for including me in your list of links.

    Since you shared your emergency fund guide, I’ve been browsing your blog, and you have a lot of solid personal finance advice to offer, so I’ll link to you as well – if that’s okay :)

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  17. OneTamad

    I hate to sound stupid, but I’m a beginner at this. How do you build up an emergency fund?

  18. Celine

    That would depend on how much extra money you can set aside each month. Even if it’s only Php 500/month, the important thing is that you set aside some money regularly that you can use for emergencies.

    Of course, the more you can set aside per month, the easier it will be to build an emergency fund that’s worth 3 or 6 months of your living expenses (whatever your goal is).

    Does that answer your question? Just let me know if my explanation isn’t clear.

  19. OneTamad

    Thanks. :) That was the method that I thought of, too. The emergency fund is still different from my actual savings, though, right?

  20. Celine

    It depends on what you plan to use your savings for. It’s not a good idea to save “just because”, or else it’ll be easier to spend your savings on unnecessary expenses. Are you saving up for your retirement, for travel, for a laptop you’ve been eyeing, or for a house? Your savings have to be “assigned” to go somewhere so that you know what it is that you’re saving up for.

    In my case, right now I’m saving up for my emergency fund, my retirement, and the house I hope to build. So I guess you could say I have 3 kinds of savings.

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  23. Lianne

    Thank you! Right now, I have 2 months worth of expenses. I am trying to save up at least 3 months worth so that I can put the rest in 30-day time deposits. :)

  24. frugal expat

    Hi Celine… I was just reading your posts in DIY Financial Planning section..I believe in the importance of Emergency Funds.. Unfortunately, tayong mga pinoy maraming emergency pero walang funds.. LOL!

    Anyway, you mentioned that a portion of your emergency fund had been stashed away for your medical needs. I’ve learned (sa process ng self study ko about personal finance), na it is important to have a long term medical insurance. Lalo na sa Pilipinas kasi mahal ang PhilHealth and it does not covered us also after 60 yrs old when our demand of health care is higher.

    If you have this in place, then you have a less chance of using your emergency fund. Let’s face it.. Hospitalization is really expensive sa Pinas..

    Salamat po.. Just want to share it..

    Thanks..

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