How much should you have in your emergency fund? 3 financial experts weigh in

Young adult calculates his personal finances at the kitchen table using a tablet computer.

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These expert tips can help you decide how much to save.


the main points

  • Having an emergency fund is critical to avoiding debt and protecting your money.
  • You will need to decide how much money you will put into your emergency fund.
  • Different financial experts have given different advice on this issue.

Everyone should consider owning a high-return emergency fund saving account Where the money can be accessed. An emergency fund is critical to avoiding financial disaster in the event of a drop in income or sudden costs. Without one, you may not be able to afford to pay bills or cover unexpected expenses without using a file Credit card Or get into debt in another way.

But how much should be in your emergency fund? This is a complicated question to answer, but listening to what the experts have to say can help you make an informed decision about what you need to save for a rainy day.

Here’s how much three financial experts think you should put it aside.

That’s how much Suz Orman says you should have saved

Suze Orman is more conservative than many other financial experts when it comes to how much you should save in an emergency. She recommends a larger emergency fund that provides more protection.

“Your long-term goal is to put eight months of living expenses into your emergency fund,” Orman said. “I know this is a lot, but I want you and your loved ones to be okay if you are laid off or sick for an extended period of time.”

She acknowledges that saving a lot can take a long time, but she recommends working on it over time and starting as soon as possible trying to build your savings. “The important issue is that you start saving today, so each month you will get closer to your goal,” Orman said.

That’s how much Dave Ramsey says you should have saved

Dave Ramsey’s advice on an emergency fund is a little more complicated. He has already suggested a different amount of savings depending on your general financial situation.

“If you have consumer debt, I recommend saving an initial $1,000 emergency fund,” Ramsay said. He made this suggestion so you can focus on paying off the debt but also have something to fall back on so that you are not trapped in a cycle where you are making progress in paying off debt but then have to borrow again as soon as something unexpected happens.

But, after she’s paid off everything she owes, Ramsey’s proposal comes close to Orman’s. Ramsay recommended: “Once you’re out of debt, it’s time to increase that amount and save three to six months of expenses in a fully funded emergency fund.”

This is a broad range, but Ramsay did offer some advice to follow, suggesting that if your job is stable or there are two incomes in your household, you can err on the side of a smaller fund. But for those with less stable incomes, including those who are self-employed and people who work on commission, more funding is needed.

This is how much Mark Cuban says you should have saved

Finally, billionaire investor Mark Cuban has similar advice to Ramsey, although he errs on the side of a larger fund.

“If at some point you don’t like your job, get fired, have to move, or something goes wrong, you’ll need at least six months of income,” Cuban told Vanity Fair.

Ultimately, it is up to you whether you want financing for three months, six months, eight months, something in between, or even a larger amount of savings. But the bottom line is that while there is disagreement about how much to save, the important thing is to have something set aside to protect your future.

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