October 30, 2019
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?
- Bond funds in retirement accounts
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