Any good financial planner will generally tell you to set aside at least three to six months’ living expenses for a rainy day.
If you ever need this money, you’ll need it fast, but isn’t there somewhere better to keep it than your mattress? Here are a couple of options.
An emergency fund helps you pay bills such as your mortgage, utilities and groceries in the event you lose your job or become disabled, or to pay for an unexpected car or home repair, to name a few examples. You may need more than six months’ expenses if you lose a hard-to-find job or your household relies on one income.
If you put off this financial necessity, you’re not alone. More than one in four Americans save no money for emergencies, according to a recent Bankrate survey. About one in five people sock away enough to cover less than three months of expenses.