Imagine your car breaks down, your roof leaks or your fridge dies. Do you have enough cash available to pay for these unexpected expenses? Or would you have to use a credit card or other loan to handle emergencies?
A general rule for emergency savings is to have enough to pay today’s bills plus living expenses for 3 to 6 months. But there are other things to consider. What’s right for you depends on whether you’re single or raising a family, how much you earn and what sources you can tap into if you need money fast.