Determining the Ideal Emergency Savings Fund and Realistic Expectations
Why you need an emergency savings fund
One of the main reasons to have an emergency fund is to protect against income loss and cover basic expenses during a crisis.
If job loss occurs, the ability to find new employment quickly reduces the necessity for a large emergency fund.
The ideal minimum emergency savings fund: $2,467
Research indicates that $2,467, or about one month's income for a lower-income household, may be a more practical emergency fund target.
Bottom line
Striving for a more achievable emergency fund amount, such as $2,467, can still provide essential financial protection without the need for several months' worth of expenses.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.