How much should you really have in an emergency fund?


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How to determine what you need to save for unplanned expenses.

Anyone can experience a surprise medical bill, major car repair or the loss of a job, but not everyone is prepared for such a sudden financial hit. An emergency fund can mean the difference between handling unplanned expenses with confidence and facing an unexpected financial crisis. So, just how much do you need to save? The answer depends.

How much do you need in an emergency fund?

Many experts recommend a stash that covers three to six months of basic living expenses. However, some people feel more comfortable with 12 months of living expenses in reserve.

There isn’t a one-size-fits-all answer to how much should be in your emergency fund. However, with a bit of thoughtful consideration, you can arrive at a number that’s right for you.

How to choose the amount that’s right for you

Here are some questions you can ask yourself to help you determine how many months of expenses you might need in an emergency fund:

  • If I needed to find another job, how long would it take? Do I have skills that could be transferred to another line of business? Are these skills in-demand?
  • If I’m unable to work, would anyone else in my household be able to generate enough income to cover expenses?
  • How’s my health? Is it reasonable to expect my health status will remain steady?
  • What kind of family or medical leave is available through my employer?
  • Do I participate in any high-risk activities, such as extreme sports?

Adjust your fund for major life changes

As you can see from the questions above, everyone’s situation will be different. If you’re single with no dependents, you’ll probably need less in an emergency fund than if you’re the primary provider with a spouse and a couple of kids. And your situation may change over time.

Any time you have a major life change, like buying a home, getting married, having a baby or adopting a child, or have a change in health, re-evaluate the amount in your emergency fund and adjust accordingly. When you tally monthly expenses, include housing, utilities, insurance, food, child or elder care, transportation, pet care, debt, and anything else that’s necessary for you and your family.

How to build an emergency fund

Remember, any emergency fund is better than no emergency fund. Even if you can only tuck away $50, that’s something!

Commit to contributing to your emergency fund each month until you reach your goal. Click here for tips on building an emergency fund without feeling deprived.

Where to put your money

Emergency funds should be kept where you can quickly access your funds. Consumers money market accounts and savings accounts keep your money at your fingertips through Online Banking and the Consumers Mobile App—and they pay interest.

Consumers provides banking services for more than 100,000 members. If you have banking questions, call us at 800-991-2221. We make it easy to bank how you want, when you want.

Federally insured by NCUAsaving

Tools and resources

As part of the Consumers family, you have free, unlimited access to financial management services.

Learn more

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