How Much Is "Enough" For Emergencies?

How much do you actually need to be saving your emergency fund? Once you’re debt-free, you need a fully funded emergency fund of 3–6 months of expenses.

The average monthly expenses in America range from about $4,300 for singles up to nearly $9,200 for a family of four. So that would be $4,300 x 3 = $12,900 for a three-month emergency fund. Or you could do $9,200 x 6 = $55,200 for a six-month emergency fund.

You need to ask yourself these three questions before you use your emergency fund:

1. Is it unexpected?
2. Is it necessary?
3. Is it urgent?

If the answer is yes to all three, you’ve got a real emergency—and a real need to use your emergency fund. If not, then it can wait.

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