Fearless Finance generally recommends 3-6 months of Emergency Savings.  Deciding how many months is both financial and psychological. If your job is very secure, you are single, and young and healthy, 3 months should do it.  If you like a lot savings to sleep at night, go for 5-6 months. Ask yourself these questions to help you decide:

  1. would it take you 5 to 6 months to find another job with the same pay if you lost yours?
  2. Does anyone in my household have a chronic health issue that prevents them from working sometimes?
  3. Do I feel stress or insecurity if I don't have a lot of money saved in case I have to move or change my life dramatically?

If you answered 'yes' to any of the questions above, we recommend 5-6 months of Emergency Savings. If your job is very secure and your health is good, you can decide how much you need within this range to feel comfortable. 

Did this answer your question?