Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Enought to get by for 1 year if you lose your job at your current spending level. I recommend going above and having 2 years worth.
Also add on anything that you might not have adequate on insurance for. For example, if you live in a flood-proned area but don't have flood insurance, add enough money to cover flood damage to your emergency savings.
Most people should probably have 6 months' worth of living expenses. Since that seems overwhelming to most people....start with a goal of $500, which will cover most minor emergencies. Here's a good article on the subject:
Financial advisers used to say 3-6 months of living expenses, but since the downturn, ours told us 6-12 months. I think mysticaltyger is right though. Start with a smaller goal and keep pushing it upwards.
its not specically allocated for emergencies. it can be used for anything.
Well, you'd be a fool to buy a $30k brand new car and leave $2k in your savings account. You should "mentallY" allocate a portion of it for emergencies and NEVER EVER TOUCH IT unless you're in an emergency (loss of income, large medical bills, etc).
OP- Make a goal to start with 6 months of "bare bones" living expenses. Look at your monthly budget and figure out what is "essential". If you lose your job, you'll need to keep paying rent/ car insurance/ medical insurance, but you can cut back on gas (if you're not commuting daily), entertainment/meals out, savings, etc. My "essentials" are about 55-60% of my monthly budget, so I need to save 6 months x 60% of my monthly income to have a "healthy" e-fund.
Well, you'd be a fool to buy a $30k brand new car and leave $2k in your savings account. You should "mentallY" allocate a portion of it for emergencies and NEVER EVER TOUCH IT unless you're in an emergency (loss of income, large medical bills, etc).
if i bought a 30k car, its not like my accumulated wealth would be reduced by 30k. i would finance it so my savings wouldnt take that much of a hit. i think people should be saving as much as possible so advice on how much time to have money for doesnt make sense to me. you should always be growing that.
so if someone says 1-2 years, what should the person be doing after he has that? i guess start allocating the additional money for retirement? id assume that money would be tapped anyway if it needed to be.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
