Is 50K a good start for emergency fund? 🙏

General
1

I always hear that you need 3-6 months of EMERGENCY fund pero if you are just starting to build yours, in your opinion, how much is a good start?

Let me know & feel free to comment :smiling_face: Thanks

2

All depends on your budget. we have about 15k as an emergency, which should get us through 6 months.

3

Thanks

4

I’d love to have 50k. I just met my goal of 20k and am proud of it

5

just calculate 6 month’s of expenses. that’s your number

if your monthly expenses are 10k, then 50k is too low. if your monthly expenses are 1k, then 50k is higher than necessary

6

This will depend on your current expenses as well as other things like whether or not it would be easy for you to find another similar paying role that you have now.

Another thing you could consider is the liquidity of your EF - you don’t have to have just one EF.

For my wife and I, our EFs are cash on our person (we keep $50 on us, at all times), cash ar home (a few thousand), two separate accounts with quite a few thousand each in same, and ww can access a lot more money by drawing down on payments we have made ahead on our mortgage.

She and I are big fans of EFs, so consider you own needs, as well as the fact that an EF can be split across different forms of liquidity.

7

@JOSH Thanks for your insight

8

Our bills average 5k a month, so we have 30k. 50k sounds like a great start to me.

9

that’s even enough if nuclear war breaks out.

10

Take a look at all your bills, include food, gas for car, etc. per month. Things like cellphone, internet can be decreased if life warrants it. Add it all up, times it by 6. That will be the amount of your emergency fund. $50k is a lot, but if you can manage it, that’s great! I would need $25k counting my mortgage to be comfortable without having to decrease my cellphone or internet. I have a bunch of streaming services which I would drop all except one…probably Hulu. Cheapest one out there. But if I had to, I’d drop that as well. So take a look at what you might have to sacrifice if it came down to it.

11

@LENAHZ
Thanks for your insights

12

You’re welcome! Good luck!