Most financial experts recommend that you have somewhere between three months and six months of basic living expenses in your emergency fund. The three month guideline is generally recommended for those who are in salaried positions and have more secure employment. This amount can seem daunting at first, but the idea is to put a small amount away each week or two to build up to that goal.
Emergency savings are best placed in an interest-earning bank account, such as a money market or interest-earning savings account, that can be accessed easily without taxes or penalties. Emergency savings should be placed in an account that is easily available, so you do not incur early withdrawal penalties as you would with an account such as a CD or IRA.
59% of adults can’t pay for a $1,000 emergency through savings.
Illness/accident, unexpected job loss, home/car repair