What is a good amount to save every month for emergency money?

Asked by Kaila

2 Answers

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Answered by Kim Miller, CFP®PRO+ in Redmond, WA
Hi - You will want to have at least 3 months expenses saved up, but 6 months is better. For example, if it costs $2,000 to run your household every month, than you will want to have at least $6,000 in the bank ($12,000 for 6 months). From there it is a question of how soon do you want the total in your bank? If you want to do it in one year, divide by 12 for a monthly savings amount or by payday if you want to do it per payday: there are 24 paydays in a year if you are paid twice per month (26 if you are paid every two weeks)., So if you need $2,000 for every month and you want to have 6 months' in the bank ($12,000) and do it in one year, then your monthly savings amount will be $1,000 ($500 per payday if paid twice per month) You will earn a little interest along the way but not enough that you can hope to make up for a smaller deposit.. Good luck! | 08.14.15 @ 21:29
Comments 2  
Meredith L — It seems that every time I try to save anything though, something breaks and we're back to zero. I want to save for those rainy days but I can't justify money sitting in the bank when necessary things are needed now. | 08.15.15 @ 01:59
Ronald Omar Flores, Membership Consultant/ Financial Consultant in Alviso, CA — Try to cut back on your wants or luxury item (like cable TV, dinner out, and etc) and try to find investment companies to save your money that will give you high returns. Money needs to grow with time or long term. Banks purpose on my opinion is for immediate needs of cash only. | 11.25.15 @ 08:06
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$commenter.renderDisplayableName() — {comment} | 12.11.16 @ 00:23
Many people will tell you, 3-6months. But lately I can across individual that can find jobs or any source of income almost in 1 year. So in my humble opinion, I want to advise people if they can do it year! Do it!
Especially, if your the bread winner in the family. | 11.25.15 @ 07:57
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$commenter.renderDisplayableName() — {comment} | 12.11.16 @ 00:23
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Answered by

Kim Miller
Kim Miller, CFP®PRO+ in Redmond, WA

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