I always hear that you should at least have 3 months to 6 months of expenses saved up in an emergency fund.
I would love to know:
- How much do you aim to keep? 3months? 6 months? More or less?
- Why did you choose that amount?
- How long did it take you to get the amount into savings?
I can start. We aim for 6 months of expenses, but the 6 months is on a barebones budget versus a full monthly budget. That way, we don't end up with too much in there. We chose that amount based on the fact that we have 2 kids and would like the transition period to be easier to manage if something did happen.
From start to finish, we slacked off the first round saving up our money. It actually took us almost 2 years to save up our 6 months because we had decided that we were going to slow down and enjoy our life a bit more after getting the debt paid off. Also, we actually had a few emergencies that we ended up funding in the process as well. We bought a used car for almost $9,000 and then another one for another $5,000. Our cars were pretty old and were starting to fall apart though. So, I guess in that two years we about saved up our emergency fund twice.
How about you?