Emergency fund: How much is enough?

Financial experts tell us our numero uno priority in being money savvy is setting up an emergency fund. It’s more important than contributing to a 401(k), saving for a house, or even paying off credit card debt. The emergency fund goal: three months’ worth of living expenses. At least, that used to be the golden amount.

On more than a few occasions, I’ve heard (or read) a new magic number: six months of living expenses. SIX. The reasoning is that in this economic climate, it’s taking longer to find a new job after a layoff. If you’re married, you’re not excluded from this new rule, since it’s more likely than ever that both people could be laid off.

Scary, right? I’m all for emergency funds (got mine to three months’ living expenses last year), but am I the only one who thinks six months of living expenses is a LOT of money? Especially in New York. If I’m able to sock away a six-month emergency fund at a Manhattan cost of living, that’s a really nice chunk of change. Like, I could buy two or three of those foreclosure homes in California or Florida…and take a vacation.

What do you think? Will you aim for six months in your emergency fund? Or do you think the financial pros need to stop scaring the bejesus out of us?

Money-saving secret: your library

OK, it’s actually not a secret at all. It’s pretty easy to see why frequenting your local library saves cash: you can borrow books, magazines, and DVDs instead of buying them. Presto, money saved! But lately there’s been a plethora of articles about library usage going way up as the economy plunges. This post from Aaron Crowe at WalletPop and this article from the LA Times sum up the situation.

It amazes me that it takes a recession to get people into libraries. Why wouldn’t you go to the library all the time, not just when the economy is tanking? What’s not to like? I was talking about this last night with my dad. My parents have pretty much stopped going to Blockbuster in favor of my hometown library, which is a two-block walk from their house. We agreed that there’s a downside to the secret being out: The selection is picked over, especially in the DVD department. That’s where it takes a little legwork. Mister Redhead and I are whizzes at reserving things online—the New York Public Library is such a huge system that we’ve yet to be unable to find a title we really want.

Confession time: Seeing as I work in publishing, I feel slightly guilty about the whole “borrow instead of buy” attitude. Here’s how I rationalize it so I can sleep at night:

1. The library is not some new recessionista trend for me. I practically grew up at the library, so it’s not like I’m changing my spending habits here. Since I moved to New York, I’ve dropped in at my local branch almost every Saturday morning.
2. If there’s an author I really like, a classic I want to add to my collection. or a small publishing company I want to support, I will buy those books. And because I live hundreds of miles from my relatives, I feel like I’m standing in line at Barnes & Noble on a monthly basis to purchase giftcards to mail with birthday cards. (Hey, it might not be original, but I think everyone can appreciate a B&N giftcard.)
3. Sometimes the number of holds the library has on an item is insane. We’ve been waiting almost a year for season 2 of Rescue Me, and I miss me some Denis Leary. If I see it at a reasonable price, I am snatching it up, library be damned.

Do you find yourself going to the library more nowadays? Or are you like me: a lifelong fan, no matter what the economy is doing?

Why am I doing this?

The first post of a blog is always the toughest, so I’ll just lay out my reasons for starting this site. I’m a saver: Always have been, always will be (hopefully). But I get the feeling that I could be doing more, saving smarter, spending less. That feeling was amplified when I moved to Manhattan two years ago to work in publishing. Yes, live in Manhattan, work in publishing. In other words, I’d be considered a financial success if I didn’t go bankrupt in six months. Well, I’m not bankrupt, but I don’t feel like a huge success either.

So this blog has a few purposes:

1. To help me be more aware of my spending habits. If I put it in writing, maybe that will shock me into being a smarter spender.
2. To learn more about the intimidating aspects of personal finance and share what I find out with you, dear readers. CDs, 401(k)s, buying a home—the things you know are considered “good,” but that seem to be masked in a language that’s impossible to understand.
3. To practice writing. I write for work, but not every day. I blog here and there for other sites, but I want to have real ownership of a site. And if I’m going to practice writing, I might as well take on a topic that’s challenging for me to put into words: finance.

I’m not a financial expert; I’m just a firm believer in learning from my own mistakes and those of others. I hope you feel the same way, and that you’ll learn from me and leave some comments so I can learn from you. Welcome!