Previous Poll Results
So far I have conducted three polls on this site, one about paying mortgage with credit cards is still ongoing and two were closed. The reason I like to run opinion polls is to get real life people’s opinions on issues that are closely related to personal finance, in addition to getting the news from the media.
The first poll was to see how the idea of having a will is received among young people (younger than 50 years old). The poll run from April 14, 2007 till the end of the month for about two weeks and received 130 responses. The result of the first poll is shown in the plot below.
As we can see that despite the urge from financial professionals about the importance on creating a will before it is too late, the idea hasn’t really struck young people yet as the percentage of people in their 20s and 30s having a will is very small. In fact, only 19% of the total respondents said they have a will. However, even with a small number of samples, the trend is quite clear. As we get older, a will becomes an increasingly important part of our financial planning. I don’t have a will and the reason is that I don’t feel it’s necessary at my age. There are a lot of other things for me to worry about and having a will isn’t on the radar yet. At some point later, I will have to consider it.
The second closed poll was on how much we should save for our emergency fund. The poll was created on April 26, 2007 after a group of bloggers discussed whether it’s possible that one could save too much on emergency fund. In less than four week, 302 people cast their ballots and the results are in the following picture.
For the second poll, the distribution is quite even, I am surprised to see that nearly a quarter of the respondents (23%) don’t have an emergency fund at all.
It’s unclear however what makes them choose not to set aside some money for unpredictable events. Is it because they are not aware of this issue or they don’t have enough fund to setup one? Another possibility could be that they have other means (other than the money that is earmarked for emergency) to cover their livings in any unexpected situation. It would be great if I also know the reason, not just the result. On the hand, the largest group of respondents (26%) indicate that they have more than 12 months’ worth in their emergency fund.
While a well-funded emergency account is crucial for financial stability, I personally feel it’s not necessary to have an emergency fund that covers our family for more than one year. The most likely instance of an emergency according to my definition is the lose of job. In this case, the emergency fund will be used to make up the a significant portion of the lost income and the size of fund depends on how long it will take me to find another job. I may not be able to find a new job tomorrow if I lose my job today, but it certainly won’t take me a year to find a replacement.
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One Comment
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It took me almost two years after I was let go to find another job. (I didn’t want to relocate.) Therefore, an emergency fund to cover 12 months or more of living expenses would be be neccessary.