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No. of Recommendations: 1
1. Six months of expenses is too generic IMO, but it's not bad as a rule of thumb. Your problem is what happens if the higher wage earner gets run over by a bus -- and lives. That net may be six months of expenses, or not.

2. Not cash only for the emergency fund, but readily available funds like breakable CD's, ST treasuries, etc. I know that's a hard emergency number when you're young ... but bad stuff happens.

3. Actually I used a home equity line of credit for cash flow since about forever and reasoned that it allowed me to reduce my emergency fund. It helped with purchases where I KNEW I'd be able to make up the money. Dangerous -- but OK if disciplined. I also used it for the kids college education. Again, I saved enough for two years and my cash flow allowed me to finance the final two through current savings AND the HELOC. PS: You're right -- the home is exempt by formula from FIFA but your investments are not.

4. Heck, at your saving rate, with kids, you should be teaching ME. Congratulations! The only thing I'd add is that AFTER kids, you have more money to put toward retirement than you can imagine. I keep a pretty tight budget, but kids cost in ways that creep throughout, and I've saved more than I thought. That LBYM habit is wonderful!!!!

Got to run. DW has a few more things to get. Again, congratulations. It NEVER hurts to run ideas past these people. I LOVE to learn how their minds work.

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