{"id":5615,"date":"2019-01-21T19:15:58","date_gmt":"2019-01-22T00:15:58","guid":{"rendered":"http:\/\/billlosey.com\/?p=5615"},"modified":"2019-01-21T19:15:58","modified_gmt":"2019-01-22T00:15:58","slug":"%ef%bb%bfyour-emergency-fund-how-much-is-enough","status":"publish","type":"post","link":"https:\/\/billlosey.com\/knowledge-center\/%ef%bb%bfyour-emergency-fund-how-much-is-enough\/","title":{"rendered":"\ufeffYour Emergency Fund: How Much is Enough?"},"content":{"rendered":"\n

<\/strong>An emergency fund may help alleviate the stress associated with a financial crisis.<\/em><\/p>\n\n\n\n

Have you ever had one of\nthose months? The water heater stops heating, the dishwasher stops washing, and\nyour family ends up on a first-name basis with the nurse at urgent care. Then,\nas you\u2019re driving to work, giving yourself your best, \u201cYou can make it!\u201d pep\ntalk, you see smoke seeping out from under your hood.<\/p>\n\n\n\n

Bad things happen to the best\nof us, and instead of conveniently spacing themselves out, they almost always\ncome in waves. The important thing is to have a financial life preserver, in\nthe form of an emergency cash fund, at the ready.<\/p>\n\n\n\n

Although many people agree\nthat an emergency fund is an important resource, they\u2019re not sure how much to\nsave or where to keep the money. Others wonder how they can find any extra cash\nto sock away. One recent survey found that 29% of Americans lack any emergency\nsavings whatsoever.<\/p>\n\n\n\n

How Much Money? <\/strong>When starting an emergency fund, you\u2019ll want to set a target amount. But how much is enough? Unfortunately, there is no \u201cone-size-fits-all\u201d answer. The ideal amount for your emergency fund may depend on your financial situation and lifestyle. For example, if you own your home or provide for a number of dependents, you may be more likely to face financial emergencies. And if the crisis you face is a job loss or injury that affects your income, you may need to depend on your emergency fund for an extended period of time.<\/p>\n\n\n\n

Coming Up with Cash. <\/strong>If saving several months of income seems an\nunreasonable goal, don\u2019t despair. Start with a more modest target, such as\nsaving $1,000. Build your savings at regular intervals, a bit at a time. It may\nhelp to treat the transaction like a bill you pay each month. Consider setting\nup an automatic monthly transfer to make self-discipline a matter of course.\nYou may want to consider paying off any credit card debt before you begin\nsaving.<\/p>\n\n\n\n

Once you see your savings\nbegin to build, you may be tempted to use the account for something other than\nan emergency. Try to budget and prepare separately for bigger expenses you know\nare coming. Keep your emergency money separate from your checking account so\nthat it\u2019s harder to dip into.<\/p>\n\n\n\n

Where Do I Put It? <\/strong>An emergency fund should be easily accessible, which\nis why many people choose traditional bank savings accounts. Savings accounts\ntypically offer modest rates of return. Certificates of Deposit may provide\nslightly higher returns than savings accounts, but your money will be locked\naway until the CD matures, which could be several months to several years.<\/p>\n\n\n\n

The Federal Deposit Insurance\nCorporation insures bank accounts and certificates of deposit (CDs) up to\n$250,000 per depositor, per institution in principal and interest. CDs are time\ndeposits offered by banks, thrift institutions, and credit unions. CDs offer a\nslightly higher return than a traditional bank savings account, but they also\nmay require a higher amount of deposit. If you sell before the CD reaches\nmaturity, you may be subject to penalties.<\/p>\n\n\n\n

Some individuals turn to\nmoney market accounts for their emergency savings. Money market funds are considered\nlow-risk securities, but they\u2019re not backed by the federal government like CDs,\nso it is possible to lose money. Depending on your particular goals and the\namount you have saved, some combination of lower-risk investments may be your\nbest choice.<\/p>\n\n\n\n

Money held in money market\nfunds is not insured or guaranteed by the Federal Deposit Insurance Corporation\nor any other government agency. Money market funds seek to preserve the value\nof your investment at $1.00 a share. However, it is possible to lose money by\ninvesting in a money market fund. Money market mutual funds are sold by\nprospectus.<\/p>\n\n\n\n

Please consider the charges,\nrisks, expenses, and investment objectives carefully before investing. A\nprospectus containing this and other information about the investment company\ncan be obtained from your financial professional. Read it carefully before you\ninvest or send money. \n\nThe only thing you can know about unexpected\nexpenses is that they\u2019re coming \u2013 for everyone. But having an emergency fund\nmay help alleviate the stress and worry associated with a financial crisis. If\nyour emergency savings are not where they should be, consider taking steps\ntoday to create a cushion for the future.\n\n\n\n<\/p>\n","protected":false},"excerpt":{"rendered":"

An emergency fund may help alleviate the stress associated with a financial crisis. Have you ever had one of those months? The water heater stops heating, the dishwasher stops washing, and your family ends up on a first-name basis with […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[18],"tags":[],"class_list":["post-5615","post","type-post","status-publish","format-standard","hentry","category-blog"],"_links":{"self":[{"href":"https:\/\/billlosey.com\/knowledge-center\/wp-json\/wp\/v2\/posts\/5615","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/billlosey.com\/knowledge-center\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/billlosey.com\/knowledge-center\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/billlosey.com\/knowledge-center\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/billlosey.com\/knowledge-center\/wp-json\/wp\/v2\/comments?post=5615"}],"version-history":[{"count":0,"href":"https:\/\/billlosey.com\/knowledge-center\/wp-json\/wp\/v2\/posts\/5615\/revisions"}],"wp:attachment":[{"href":"https:\/\/billlosey.com\/knowledge-center\/wp-json\/wp\/v2\/media?parent=5615"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/billlosey.com\/knowledge-center\/wp-json\/wp\/v2\/categories?post=5615"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/billlosey.com\/knowledge-center\/wp-json\/wp\/v2\/tags?post=5615"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}