Use these recommendations as a guide to determine how much cash will make you feel comfortable with your emergency fund, keeping in mind that a month’s expenses represents the minimum amount of money you need to survive-not your regular budget. Some say you can get away with a few months’ expenses or less, but all would agree that it pays to aim even higher. Just how long depends on your job security, your risk tolerance, your age, and other factors. They each recommend a slightly different approach, but the takeaway is clear: the purpose of an emergency fund is to help get you through difficult times, so it needs to be big enough to cover your basic expenses for a set period of time. To help you think through the decision, we’ve collected advice from a range of experts. So how much should you really save in an emergency fund, and how do you arrive at that number? But having a clear, intentional savings target is the best way to achieve true peace of mind. That money can help you pay your bills if you lose income or incur an unexpected expense. Saving anything in an emergency fund is great, and depositing whatever you can will build a cushion over time. Given the record unemployment caused by the COVID-19 pandemic, which left millions of Americans without regular income, the benefits of a financial safety net are as clear as ever. The amount of money you should have in an emergency fund is something only you can decide, because it’s got to be based on your own situation and what makes you feel secure. It’s one of the most fundamental rules of personal finance - but if you ask 11 different experts about it, you could get 11 different answers. For more information, see How We Make Money. Some links on this page - clearly marked - may take you to a partner website and may result in us earning a referral commission. We want to help you make more informed decisions.
0 kommentar(er)
