Emergency fund upside down and backwards

[tuixiu]

I think OP's personal situation is a large part of the formula too.

Can current job/income be replaced fairly easily? If you're something like a nurse or pharmacist you shouldn't be out of work long, but if you're a highly paid specialist for some obscure database maybe not so easy.

Have spouse who works? Also depends if in non-similar industry and perceived safety of their job etc. but surely having another income stream is a big factor in what type of emergency stash you need.

Also = how lean can you go? Some people have financial commitments be they debt or healthcare related that would surely warrant a larger cash reserve, versus others who could go beer/electricity/internet/ramen and be fine if needed.

My wife and I keep one year + 10k in cash... the one year is calculated for us both losing jobs and having unemployment benefits for six months, and the 10k is a number we pulled out of our (air) thinking it would smooth anything like a major car or house repair.

 

[Gone4Good]

If you really think your job is in jeopardy soon and if you really think your emergency fund is insufficient, tapping the HELOC now is a lower cost way to manage your liquidity than having to sell equities that are down 40% on average. It seems to make sense to borrow the emergency funds you think you need now and then divert all savings that would have gone to build your emergency fund to paying down the HELOC.

In addition to the prospect of having the HELOC frozen, I'd also consider the solvency of your bank. The HELOC commitment is only as good as the bank providing it and many banks won't make it through this recession.

Count my vote as "I'd tap that baby"


Edit: Whoops . . . didn't see the follow up that you had already decided to borrow on the HELCO . . . glad I could help.