How Much Should You Have in Emergency Savings?
You never know when you’re going to need money for an emergency. That’s why it’s a good idea to put some cash aside that you can always draw on if you need it. This will provide you with peace of mind, and it will also ensure that you are never blindsided by an unexpected financial emergency. But how much exactly should you put aside? Here are some tips to keep in mind for deciding on the size of your emergency savings fund.
You should have enough to pay your rent for the next three months.
If you experience a financial emergency, one of the first things you’ll need to do is to make sure you can afford to stay in your current residence. For instance, if your rent is $900 a month, then you should have at least $2,700 in your emergency savings fund. Having a three-month cushion will give you time to ensure that you’re able to continue to pay your rent afterward. You should also include other essential bills, such as your electric bill, in your emergency fund.
You should also have enough to pay your other living expenses.
Keep in mind that bills aren’t the only thing you have to pay for. You also need to pay for groceries for yourself, as well as for any family members who depend on you. If you take any medications or require other medical products, then you should have money on hand to pay for those. You should also be able to pay for gas or public transportation for the next three months. You may also want to put aside some money for emergency health expenses, especially if you have a chronic condition.
THPK Certified Public Accountants has been serving the community of Steamboat Springs, CO, since 1972. Their staff has a combined 125 years of experience with accounting and tax preparation, so they’re fully prepared to provide you with the services you need. They are committed to building strong and lasting relationships with their customers. If you’d like to learn more about the services they offer, then call (970) 879-1787 today.