How much money do you recommend in an emergency fund/savings account ?

When I was single I did good to pay the bills, so I had nothing in savings. But over the years, after I paid down my debt I always tried to have enough to pay at least 6 months worth of my bills. And I kept that separate from my emergency fund. It is too easy to see the money and think I will take a little bit and put it back next week. And before you know it next week never comes and you have no back up money in case something happens.

A few thousand at the very least. 

3 to 6 months worth of paying bills is ideal, but I know it is unrealistic for most.  I would agree that a couple of grand would be good. 

*before* paying down debt, I would say $1000.

I feel comfortable with an 8mo emergency fund (8 months worth of living expenses in order to pay bills, food...etc) - especially if you rely on a car for work, own a home (which, conveniently, always has something to get fixed when you are struggling)...etc.

However, depending on the debt (consumer debt? student loans? medical bills?) For example, in my case, the student loans that I had were at such a low rate, I felt more comfortable building up my savings acct (which gained about the same interest rate) rather than paying off students loans.... I feel as though an emergency fund is super important (at least 6mo worth of expenses) because it covers your food and shelter, family, medical bills - in the event you don't have insurance...etc.

1,000 emergency fund, then pay off debt, then bank as much as possible in savings account. 

Quote:

Originally Posted by aliadam 

Well I know this will go against everyone else's advice.....I'm ready for the onslaught LOL, but I'd say very little....not more than a few hundred at MOST. I'd rather pay down debt (especially if you're talking credit card debt) with a higher interest rate, than save where I get a very low interest rate to me. I'd actually lose money that way if I'm bringing in less in interest TO me then I'm paying OUT in finance fees. If I needed money for an emergency I could always use a credit card to put it on there. So I'd only keep a few hundred to on hand cash, then otherwise, I'd just keep plowing away at my debt.

This is my thoughts as well. I understand wanting an emergency fund, I really do. It can be so stressful when unbudgeted things flood in all at once. However, in savings you make nooo extra money, interest rates are a joke. If you have debt chances are that you are being charged interest, therefore you are losing even more money for every day those bills are hanging over your head.

It's like you have a boat with a leak. Do you let it continue to flood while you try and move everything into a dry area, or do you try and plug the hole? I'd rather plug the hole and try to minimize the damage as quickly as possible.

Quote:

Originally Posted by aliadam 

Well I know this will go against everyone else's advice.....I'm ready for the onslaught LOL, but I'd say very little....not more than a few hundred at MOST. I'd rather pay down debt (especially if you're talking credit card debt) with a higher interest rate, than save where I get a very low interest rate to me. I'd actually lose money that way if I'm bringing in less in interest TO me then I'm paying OUT in finance fees. If I needed money for an emergency I could always use a credit card to put it on there. So I'd only keep a few hundred to on hand cash, then otherwise, I'd just keep plowing away at my debt.

I agree with aliadam - VERY LITTLE.

If you've got debt, especially high-interest debt like credit card debt, I'd be paying that off first.  For a round number, I'd say you should have $1,000 in cash for emergencies, but most "emergencies" can be charged too.