How large should your emergency fund be?
There's no "right" answer, but some of the most popular rules of thumb say:
- Save $1,000 if you have high-interest credit card debt, then spend the rest of your money repaying your debt. After all debt other than your mortgage (and possibly a low-interest student loan) is repaid, switch your focus back to building an emergency fund.
- Save 3-6 months of living expenses if you have a secure, stable job.
- Save 6-9 (or even 6-12) months of living expenses if you have irregular income or work in a volatile industry.