I use two savings accounts.

One is my longterm emergency fund and I try to never touch it. The other covers all my sinking funds – I use Quicken to make sure there’s enough in there for everything.
One place where I disagree with DR a little bit is I think $1000 is too small a BEF for many people. I have heard DR on the podcast suggesting to particular individuals that they increase theirs. There are certain “emergencies” that are very predictable. For example the Car Talk guys suggest that an old car takes $600-$1200/year for repairs. If you have an old car I think you should aim for a BEF that’s big enough to cover $1200 in repair PLUS $1000 for the unpredictable. If you raise animals, have enough to cover a year’s average surprise vet bills. That sort of thing. You know it’s going to happen even if you can’t say when.
After I did my budget for a few years, some years back, I was able to come up with a number for my average “one time” and surprise expenses, mostly predictable. The vet, car repair, some sort of home repair, medicine, fees, holiday gifts, life insurance..I added all that irregular stuff up and divided by 12 and I put *at least* that much into the sinking savings fund each month. And then, it’s not an emergency because I have the money to cover it. Even if you’re in debt, I think it’s worth having a slightly bigger cushion so that two things in a row don’t knock you into more debt.

Have you ever noticed “emergencies’ only happen when you DON’T have the money for them?

Do you notice that when something like a tranny going out, or a furnace acting wonky when it is 10 degrees outside how much calmer you are if you KNOW you have the money for it? A bef is cheaper than therapy for you rattled nerves or a daily dose of prozak as well.
Don’t get me wrong, our bef has came and gone numerous times, but we’ve always started putting it back immediately after we’ve used it. Even if it’s only $5 at a time, because that $5 is a brick to build a brick house against the big bad wolf Murphy.
I will admit though that I tend to have one account labeled BEF. It contains the $1,000 PLUS my sinking funds for household repairs, car repairs, and emergency vet visits (not to be confused with the monthly vet budget line item for flea drops and such). While I keep ledgers on how much of the emergency fund savings account goes to what account they are all together, so if a really big repair hits say for a new tranny and the truck repair budget only has $500 in it I can “borrow” from the other sinking funds or the BEF to get the repair done before it becomes a bigger problem and therefore more expensive.
Then all snowball money goes to replace the “borrowed” money and the sinking fund is refilled with the normal monthly allotment. It is the only way we’ve been able to battle Murphy for the last nearly four years. It has slowed our snowball down, but we have also been able to meet every “emergency” as it slapped us in the face.
One benefit of my doing it this way is it makes us stop and think “Is this truly an emergency, or is it an inconvenience?” “Do we really want to slow the snowball down to fix this, or can we put up with the inconvenience until we are debt free?” Some things of course MUST be fixed right away. Like the tranny in your only vehicle, but other things, like fixing the readout panel on the fifth wheel—we can do without it until we are debt free if dh can’t find the problem. In the past we would have rushed right out and paid $99 per hour for a rv repair person to work on it, on a charge card I might add. Now we’d rather not hit the bef for something we can do without, albeit very inconvenient.We also find, like Kat, that we can do more and more repairs ourselves. The $1,000 we saved on dh finding the chewed signal light wiring on the camper and repairing/replacing it wasn’t a simple task, but he figured out how to do it and it works perfect.