How much money should I save in my Emergency Fund?
By: Pretty Effing Savvy
Tags: Personal Finance Blog, Saving Money, Personal Finance, Debt Free, Emergency Fund

You’ve heard it once, you’ll hear it again.

When it comes to thinking up an idea Emergency Fund number, the answer is exceedingly personal and unique to whoever’s building one.

In other words — Every situation is different.

Word on the street (and around the internet) is that it should be:

$1,000

3–6 months of your expenses

3–6 months of take-home pay

12 months of expenses

12 months of take-home pay

$10,000

$10,005

3.5 bars of gold

In essence, you’ll find so many different numbers and ideas anywhere and everywhere you look, that you ultimately have to just generate a number that works for you, and you alone.

Since I’m the gal writing this article, I’ll go ahead and share my two cents.

(And yes, you should definitely have more than two cents stored away for an emergency).

My emergency fund has been sitting at around $2,000 for the past few months, and I haven’t had even the most remote need to touch it.

Emergency Funds are amazing because you can almost totally feel this imaginary safety net underneath you, and if that’s not wonderful and comforting on a very deep level, then I don’t know what is.

The EF (Emergency Fund — come on now) is stored away in a separate online bank account from my normal checking account and should I need it at any point, I’d need to request a transfer of funds from that bank to my checking account, which usually takes up to a week to ten days.

My strategy here is to put any emergency charge onto my credit card (which has a $2,000 limit) and then pay off the balance as soon as the transfer from my Emergency Fund would hit.

What an emergency would look like for me:

A family emergency that would require me to buy the next flight home from Toulouse, France to LAX (around $1,800)

A family emergency that would allow me to get home at my earliest convenience (unless there’s an amazingly good deal — around $1,000)

Some strange health emergency — like, say, a hospital stay (around $1,000 — depending on if you’re American or French, this amount is either surprisingly low or surprisingly high)

Some other strange and unfortunate event totaling over $1,000

What an emergency would not look like for me (but probably would have before when I was majorly less savvy):

A once-in-a-lifetime chance to attend a copywriting workshop on the Italian riviera with a renowned copywriter

A business coach to help me get my freelance biz up and running (newsflash — ya don’t need it!)

New clothes that I paid for using my credit card and then using some of my emergency fund cash to pay off the balance (currently shaking my head at myself)

I suppose once I’m finished paying off the rest of my student loans, I’ll increase the amount in my EF— but until then, I feel totally good about $2,000 stashed away for a rainy day. Or a tornado.

It ultimately also comes down to how much you’re spending on average each month, too.

If you’re building up an EF while keeping in mind potentially being temporarily unemployed in the future (you get laid off, etc) — you’re going to want to look at how much is currently going each month to rent, groceries, electricity, bars/restaurants, etc so that you’re able to consider that number as a month-by-month marker of expenses.

Then, when you decide you want to save up 6 months in your EF and you spend around $2,000 per month — you’ll know right off the bat that you’re aiming for a safety net of $12,000.

As for me — I’m a pretty low spender now, so $2,000 could certainly last me a good bit of time. Down the line, when I potentially have a kid, I’ll probably increase that number a bit as well.

Stay cool, stay savvy (especially in an emergency!) ❤