How big should an ideal household emergency fund be?
1. 1,000
2. 2 months of rent/house payment
3. 6 months of living expenses
Answer:
3. 6 months of living expenses
While the amount varies according to cost of living, 6 months of expenses is at the top end of a good goal for emergency savings. If you are just getting started, don’t be overwhelmed by this amount! Set a weekly or monthly goal of funds you can set aside, and be diligent to stick to a plan. More than one in four Americans have less than $1,000 in savings, and the possibility of having to navigate an expense of $1,000 or more without notice is very real for most of us.
