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How Much You Need in Your Emergency Fund

More than half of you are still building up savings for a rainy day or haven't been able to save anything just yet. In order to be sure you're on track or to set a goal in the first place, you need to determine how much you'll need if emergency strikes. The biggest case for an emergency fund is job loss — if you lose your job or temporarily lose your ability to work then you'll need to rely on the money you've saved to get by.

Standard advice says that a solid emergency fund has three to six months of living expenses. Determining our individual (or family) living expenses is necessary to know if we're on track to support ourselves without income for a few months. CNN Money recommends reviewing the past three months of bills and expenses to figure out a monthly average. They remind us to include certain expenses in our calculations. Check out its must-include expenses when you


  • Mortgage (or rent)
  • Utilities, including bills for cable, Internet, landline, and cell-phone service.
  • Groceries.
  • Insurance premiums, including home, auto, and life. Add in at least $400 for individual health insurance — 1,000 for a family — in case the partner whose work provides it is the one to get laid off.
  • Other car expenses including gas and loan payments.
  • Property tax (if not included in the mortgage payment)
  • Discretionary spending. Be realistic! Certain things may be easy to cut, but don't delude yourself into thinking you can suddenly make a drastic change.


Join The Conversation
SomethingWicked SomethingWicked 8 years
working on it!...but have a wedding on the way so trying to not go overboard on that.
facin8me facin8me 8 years
" Utilities, including bills for cable, Internet, landline, and cell-phone service." If my husband and I needed for some reason to live on our emergency fund, we would not be paying for cable, internet, or a landline. We'd go to the library or an internet cafe to use the internet, and we'd do without cable television. "Other car expenses including gas and loan payments" Pay off your car before you save a full six months of emergency expenses. That way your emergency money is actually for an emergency.
graduatedsqueaks graduatedsqueaks 8 years
I made it a priority to set up an automatic withdrawal from my checking account to my ING savings account. Whether that automatic amount is $50 or $500, you'll be building up that account (and earning a little interest along the way!) If you don't think you can handle putting a lot of money aside at any one time, just have lots of smaller auto-transfers to a savings account. Start with what you're comfortable with, just $50 a month, and work your way up to a larger amount. As you start earning more money, it will be easier to just ramp up your saving amounts, making the goal of having an emergency fund more within your reach.
ilanac13 ilanac13 8 years
it's so hard in the current economy to even have that kind of emergency fund. i do know that i need to have one - but it's just not in the cards right now when i'm trying to pay everything off that i can. i'm sure that i'm not the only who one feels like this. slowly but surely i'm making a solid dent in everything, so sooner rather than later i will have the nest egg of at least 6 months for 'just in case' things.
lizs lizs 8 years
I made this a priority and was able to put away a whole year's worth of expenses in about a year...and the scrimping wasn't too painful. I feel good about having that much set aside, but now I wonder if I shouldn't siphon some off to my Roth IRA or to something less liquid but higher-earning. It's hard, because I keep thinking "Oh, I don't see any emergencies coming, I should do something better with this money."
cleegiants cleegiants 8 years
i know i need to do that and may i just say - it would have been quite helpful during the past 8 months when i was jobless. being that i had only been working for 1.5 years, i had a very small savings account and i nearly emptied it. thank god i live at home with my mom, otherwise i certainly would have ended up back there! i'm trying to change my habits now that i have a job to save as much as i can, as to avoid the stress later.
bellaressa bellaressa 8 years
I am still in the early stages and still savings. I am trying to as much as possible and hope to get a second job to help with my saving.
emily60608 emily60608 8 years
Damn, I knew this but it is so much! We are trying but are only like 1/5 of the way there
stephley stephley 8 years
I've met one person who had a decent emergency fund and it was only because she inherited some money in her 30s. Otherwise, everyone I know would be scrambling after six weeks at the very best.
bigestivediscuit bigestivediscuit 8 years
Just to clarify, when I said salary, I meant paycheck!
bigestivediscuit bigestivediscuit 8 years
My mom told me I should be able to put 20% of my salary aside every month ... um ... I really don't think I can do that.
Captious Captious 8 years
I wish I'd stop having emergencies so I could build the fund... heh
Shopaholichunny Shopaholichunny 8 years
Damn I need to start doing this! I'm grateful though that I have no real payments to make except for my cell phone and buy my own toiletries. My parents pay for everything else. So I guess I better start saving now while they are still willing to pay for my car etc. :p
Martini-Rossi Martini-Rossi 8 years
yep...I have alot of saving to do.
faerymagick15 faerymagick15 8 years
wow, that is a lot of money to have on hand!! I would love to be able to do that!
RosaDilia RosaDilia 8 years
So were figuring that an emergency fund should consist of at least $6-$8000.
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