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

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