How I set up my Emergency Fund in YNAB (2022)

Having an emergency fund is extremely important. Knowing that you can handle an emergency without going into debt is a great help for your peace of mind. Everyone should have at least 3 to 6 months of expenses squirreled away in a Checking or Savings account for an emergency. Now the question is... how should you handle your emergency fund?

I've gone through many iterations of an Emergency Fund in YNAB. What I've finally settled on is a master "MURPHY SAVINGS" Emergency Fund category group and categories with the different types of "emergencies":

Income Replacement Fund​

This is your emergency fund for when you lose your job. Or in my case as a freelance worker, when my current gig ends. I only get paid when I work (and this Thanksgiving week I'm not working) so it's good to have extra money to fill in the gaps. 3 to 6 months of expenses is what I'm aiming for so I at least need to get this back up to $15,000. Maybe I'll get it to $20,000 again in the future.

Insurance Deductibles​

This is for your auto and home insurance deductibles. Mine are $1000 each. We have 2 cars and a house but the chances of having an emergency for all three at the same time is quite low so I'm thinking $1,000 or $2,000 for this category. I have $2,000 in there now so maybe I'll move $1,000 to one of the others.

Housing Emergency Fund​

This is for unexpected housing emergencies. Like the refrigerator dying or the pipes bursting in our shower wall which happened this week! I figure I should probably have $2,000 perhaps in here too.

How do you handle emergency funds? Is there an emergency fund category I'm forgetting?