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019 – Do I Need an Emergency Fund?

Real Personal Finance

019 – Do I Need an Emergency Fund?

Do I Need an Emergency Fund?

  • Rule of thumb
    • 3 to six months of income
  • Is there a better way?
    • Know your expenses
    • What would you spend if you could only use money for essential living?
    • How many months would you want to feel safe?
  • Another way:10% of income if salaried or 20% if self-employed – Keep another 20% or 40% in retirement funds as a back up to the back up. 
    • Example $100k per year salared $10k in online savings account, $20k in bond funds in retirement accounts. If self-employed double.
  • Where should you keep the funds?
    • Online savings
    • Savings account
    • In a drawer
  • What is the back up to the back up?
    • HELOC
    • Bond funds in retirement accounts

LET’S CONNECT!

James

Scott

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