How many months of expenses do you keep in your emergency fund?

Re: How many months of expenses do you keep in your emergency fund?

• CCinLove member

  

  August 2014

  We're also on the less conservative side.  Our monthly expenses are fairly high, and we don't want to sit on a huge sum of money earning less than 1%.  We keep around $20k liquid, which would probably last 4-5 months with pretty bare bones expenses.  We also have another $15,000 or so in cash for short term savings (backyard patio project, new car fund, vacation fund, etc.) that we would repurpose in a true emergency.   Everything else is invested, and of course we could tap those funds if necessary.

  
  

  I feel like our situation is sort of weird.  DH has about as much job security as is possible...there is a huge shortage of people in his field.  Even if he couldn't find a job here, he would easily be able to move to find work.  If he wasn't able to get a job quickly at the same pay level, that would mean that something catastrophic happened and he lost his license.  In that case, we just need to have enough cash available to give us time to sell the house and downsize.

  
  

  The amount you need is really dependent on multiple variables, including job security, actual numbers, expenses, etc.  In our case, we stick with the smaller rule of thumbs because keeping a year worth of income or expenses just seems like overkill for our circumstances.  A year of expenses for someone with really low expenses seems prudent because there are certain expenses like replacing a roof, major home repairs, medical bills, etc. aren't necessarily lower because your expenses are, so you still need a big chunk of cash for emergencies.  

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