Fire & Finance Blog

Fire & Finance Blog

Emergency Funds

Quick: How much money do you have put away in case of an emergency?

Though no one likes to think about it, anything can happen. Jobs are lost. A car needs major repairs. A medical expense comes up that insurance won’t cover.

Most people actually have less than they would need should an emergency arise. Financial advisers encourage people to set aside a minimum of three to six months’ worth of income that you can easily tap into when you have unforeseen expenses. Of course, you may feel more secure with a larger stash, but make it a goal to accumulate savings of at least three months’ worth of income.

How can you save so much? Have a percentage of your income put directly into your FASNY Federal Credit Union savings account every pay period, until you’ve amassed enough that you feel secure about emergency situations. Some experts argue that it’s better not to keep too much of your emergency funds in low-risk accounts because you may risk losing too much buying power to inflation. If you feel that way, too, consider keeping a portion of your funds in a variety of short-term investments which you can sell if you are ever in need of emergency cash.

« Back to Fire & Finance Blog