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How much money should I keep in a savings account for emergencies?

Without an adequate emergency fund, a period of crisis could be financially devastating. Many financial professionals suggest that you set aside three to six months' worth of living expenses for emergencies. The actual amount, however, should be based on your individual circumstances. Do you have a mortgage? Do you have short-term and long-term disability protection? Other factors you need to consider include job security, your health and income. Be sure to review your cash reserve periodically. Since personal and financial circumstances often change, you'll want to make sure your cash reserve fits your current needs/situation.

Copyright 2006-2021 Broadridge Investor Communication Solutions, Inc. All rights reserved. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

Zack is the author of this solution article.

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