By Kristin Myers, last updated on October 18, 2022. Our editor-in-chief “makes cents” of saving money for emergencies.
I have two questions: In the first place, other than a backup stash, how much cash would it be a good.
Idea for us to have in a blustery day asset to pay for future, large yet important costs like home upkeep and fixits, vehicle support, crisis pet consideration, and so on?
Second, how can we strike a balance between saving for big things like a vacation or a new car and saving for retirement? Is there a savings percentage or formula I can follow as a guide?
Given that there are real concerns—and a possibility—that the American economy could tip into a recession in the not-too-distant future, this question is so timely.
Therefore, let’s begin by determining how much money you ought to have saved. In general, it is recommended that you keep three to six months’ worth of funds stashed away in case of an emergency; however, this amount is typically intended to replace your income in the event that you lose your job2.
I prefer six because I am cautious. Your rent or mortgage, utilities, groceries, and other expenses like your car loan and other bills would be covered by the money in an emergency fund.
