Our church has an emergency fund to get itself through lean times. Our elders call this emergency fund the “Elijah Barrel.” The reference to this is in 1 Kings 17:13-16:
13 And Elijah said unto her, Fear not; go and do as thou hast said: but make me thereof a little cake first, and bring it unto me, and after make for thee and for thy son. 14 For thus saith the LORD God of Israel, The barrel of meal shall not waste, neither shall the cruse of oil fail, until the day that the LORD sendeth rain upon the earth. 15 And she went and did according to the saying of Elijah: and she, and he, and her house, did eat many days. 16 And the barrel of meal wasted not, neither did the cruse of oil fail, according to the word of the LORD, which he spake by Elijah.
Every six months our church's congregation votes on the budget for the next six months. The church always had an Elijah Barrel fund. It had stayed the same for several years, so I asked those in charge how they arrived at the amount for the Elijah Barrel. They had originally put enough aside to cover one month's expenses, which was fine; things would have to get really tough for them to dip into this fund.
After I asked whether the Elijah Barrel still met this criterion, they decided to put more in. Inflation takes its toll on everything, and we had also taken on an assistant pastor, so the payroll obligations were higher. The elders reconsidered the amount of their emergency fund, and adjusted the amount to reflect the current expenses.
Revisiting how much you have in your personal emergency fund is also a good thing to do. If you were wise and set one up, that's great. How long ago? If it was more than a year ago, what has changed in your life with regard to your expenses? Was a child born? Did you take on an investment property or a car loan? Have other sources of funds dried up or depreciated to the point that they won't cover your expenses should you need them?
Basically, will your emergency fund last as long as it did when you set it up? If not, examine the amount to see if it needs adjusting.
Great idea! If you budget, you will know what your monthly living expenses are, and your emergency fund should be 3 to 6 months of your living expenses. When your expenses go up, your emergency fund will need to go up.
Maybe I'm completely crazy, but I don't have an emergency fund… I throw the money into investments that have a higher yield than a savings account and I figure that in the unlikely event of an emergency I can borrow the money from a credit card. It really sounds nutty, I know, but I believe it makes financial sense.
Maybe I’m completely crazy, but I don’t have an emergency fund… I throw the money into investments that have a higher yield than a savings account and I figure that in the unlikely event of an emergency I can borrow the money from a credit card. It really sounds nutty, I know, but I believe it makes financial sense.