Here’s a good question to consider – How much of an emergency fund should your have? The question is easy to answer if you know how much you are going to spend in the next 3 months, 6 months or year or if you know what type of emergencies will occur in the next 3 months, 6 months or year. Is the roof going to leak? Is the car going to break down? Are the kids or grandkids going to need braces? Is there going to be a wedding, anniversary, birthday or christening coming up? An emergency fund can be used for all of those things. However, the answer to the question is that it usually takes having enough to cover about six months to a year of expenses to really feel comfortable with your emergency fund. So, find out what your expenses are and then build your emergency fund so it covers at least 6 months of normal expenses.
And that’s my Money Minute.
The interpretations and organization of these ideas do not represent the opinions of Berthel Fisher and Company Financial Services, Inc.