How Much Do You Need for an Emergency Fund?
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How Much Do You Need for an Emergency Fund? An emergency fund should cover disasters such as a job loss, sudden illness, broken car or other catastrophe that can leave you without money or the means to work for a while. Knowing how much money to save depends on a few factors. Here are some to consider: Insurance Life, health, auto and supplemental insurance should cover some of life’s unexpected downfalls. That’s what they’re there for and should be used when needed. But many will include a deductible or copayment to be made, so having at least that amount set aside in a savings account that you don’t have easy access to should be your first step. Also, set aside enough money to pay the insurance premiums for at least six months if you lose your job. Monthly Expenses If you have an injury and can’t work, or you lose your job, an emergency fund should be able to pay all of your bills for an extended period of time. Start by saving for one month of expenses, then increase it from ...