Many people save for various reasons, and I'm a firm believer in doing what works for YOU. Despite what Dave or Suze says everyone should have, savings goals should be based on YOUR personal situation.
As a single mom, having an adequate emergency fund is VERY important to me. For several years, I worked hard to build a nice cushion for us, but now, my goal is to "maintain" the balance.
I also realize "emergency" means different things to different people. For me...
I’m not concerned about losing my job. Not only is it secure, but I’m 110 percent confident in my abilities to find another job with a comparable salary in less than three months. I’m also very flexible and I'm a risk taker. I'm not commited to any one area, so I don’t mind moving across (or out of) the country for an opportunity.
Nor am I concerned about the financial impact if I suffer an injury. Currently, I have eight weeks of vacation pay, eight weeks of sick pay, medical insurance, disability insurance, long-term care insurance, and -- God forbid -- life insurance. I think I have the worst case scenario(s) covered.
Even after all that, I still need at least $20K in my emergency fund to feel comfortable. It's like my safety net of sorts. It gives me confidence to make certain decisions and helps me sleep well at night. In addition to other back up plans, a liquid safety net ensures that my daughter and I will never be caught unaware.
In YOUR opinion, what is an appropriate amount to have in an emergency fund?
In YOUR opinion, what is an appropriate use of an emergency fund?