Even though I'm a full-time freelancer, I rent month-to-month and could always move home in the event of a serious emergency. By basic living expenses, I mean the bare minimum you would need to survive and continue paying your bills on time.Īt first, I decided $10,000 was enough for me.
If your income or expenses are unpredictable - for example, if you're a freelancer or you own a rental property that sometimes requires maintenance - saving up nine to 12 months of basic living expenses might be a better idea. If you're paying off high-interest debt, (balances with an APR of 10% or higher), it can be smart to stop saving at $1,000 and double-down on your debt before continuing to save. Some people keep $500 in their emergency fund, while others keep $50,000.Ī common rule of thumb is to have six months of basic living expenses at your disposal. People often wonder how much money they should have in their emergency fund, and there really isn't one right answer. Once I did, I felt pretty behind, so I set an ambitious goal for myself: Build a $20,000 emergency fund, from scratch, in just six months. It took me a while to realize the impact an emergency fund could have on my life. The solution, in all of these situations, is this: a lump-sum of money that's stashed away but easy to access, otherwise known as an emergency fund.
#EMERGENCY 20 LOGO SERIES#
Others land in insurmountable credit card debt after a series of medical bills they couldn't afford.
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