Here’s How Much Cash You Need Stashed if a National Emergency Happens

The general consensus advice based on the emergency fund examples is you should have 3-6 months of living expenses saved in an emergency fund.

That is a noble goal, but if you are just getting started with your emergency fund (see statistic above that most people don't even have $1,000 saved), then I would encourage you to start small.

Dave Ramsey recommends starting with $1,000 which is a reasonable initial goal. This could cover many small emergencies such as a car repair, doctor visit, or home repair.

If saving $1,000 sounds like a mountain to climb in itself, take it step by step. There are lots of ways to save (or make) an extra $1,000 that you probably haven't thought of, such as:

– Negotiating your      insurance policies – Using cash back apps or      survey sites to make a      little extra money each      month – Selling stuff you no      longer use on Craigslist      or FB Marketplace – Start a side job from      home to grow your      savings faster each      month

One idea for a good place to keep your emergency fund savings is in a high-yield online savings account. This serves two functions:

Where Should I Keep My Emergency Fund?

It is just difficult enough to access that you are not as tempted to tap your emergency fund for non-emergencies. Usually it takes a couple days to transfer the money from an online savings account to your personal checking.

You can earn extra interest on your money until you need to access it. Most traditional banks offer you a ridiculous 0.1% interest rate, but if you put your money in an online-only bank like Ally or CIT Bank you can earn a much higher interest rate.

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