01-24-2015, 06:19 AM
I agree with Eric, it's all about your personal situation.
Someone with a steady job with pretty much no chance of getting fired, rental apartment (so if something breaks then it's the landlord, not you, who pays to get it fixed), no car etc. doesn't need to keep more than 2-3 months of emergency savings.
On the other hand, if you have an old car and an old house it's much more likely that you will need that emergency fund quite often. Same thing if you work freelance or in an industry with a not-so-bright future. In these situations I'd say 6+ months is a safer bet, especially as you might run into a situation where you lose your job and then you need to fix the car/house.
Refilling the emergency fund should be the #1 priority if you have emptied it for some reason, though of course be smart about it and don't leave a 10% credid card debt hanging. But emergency fund takes priority over investments and paying back low interest debt.
Someone with a steady job with pretty much no chance of getting fired, rental apartment (so if something breaks then it's the landlord, not you, who pays to get it fixed), no car etc. doesn't need to keep more than 2-3 months of emergency savings.
On the other hand, if you have an old car and an old house it's much more likely that you will need that emergency fund quite often. Same thing if you work freelance or in an industry with a not-so-bright future. In these situations I'd say 6+ months is a safer bet, especially as you might run into a situation where you lose your job and then you need to fix the car/house.
Refilling the emergency fund should be the #1 priority if you have emptied it for some reason, though of course be smart about it and don't leave a 10% credid card debt hanging. But emergency fund takes priority over investments and paying back low interest debt.