Assuming you could set aside some money for emergencies, how much should you set aside? I've heard 3-6 months of expenses. I would feel more secure with 12 months, but I'm not sure we could ever get that much set aside. There's always seems to be something that needs replaced or fixed. I wish I'd gotten some savings in place before we had kids.
I would set aside quite a lot... in fact, more then you first think is necessary. "Be prepared for the worst and hope for the best." Is what seems to be relevant with money, and keeps me on top of things. I'm not sure exactly, but it's always good to save more then you think you'll need. Just in case.
I think 3 months is a good number to start. We naturally seek security and stability. I think that quota of savings enable us to be quiet in case we need it ourselves. Saving too, may become a pathology. I think it's important to cover the basic needs saving, but I don't think is a fundamental activity. Anyway, in a standard family, you must have a reservation for any eventuality. Whenever you can save, do it, but you have to think about the goal that you have with that savings.
The more savings you have, the better. Personally, I would continue saving even if I have reached my target amount. I'm cutting down my savings from 50% to maybe only around 20% and leave the remaining 30% as a part of my capital for possible investments and business opportunities in the future.
It has been suggested to save 3 months of expenses in case of emergency. It is hard to prepare for this time of situation but something is better than nothing. I think I would save the full 3 months, once that amount has been set aside I would continue to save but 50% of the previous amount. Just the balance to invest in something that could make you more money.
I would say at least 3 months. Usually when you lose your income, its about how long it can take to get a new income going. There is nothing worse than losing your job, and the stress you feel when you have no idea how you are going to pay your bills. It makes finding a new job even harder, and may force you to take a job you ordinarily wouldn't.
Most people say to save for at least 6 months for emergency funds. This will allow you to have a safe cushion in case some things go wrong. It also allows you to deal with less stress. After saving a sizable emergency fund, I would put everything you don't need into a savings account. Most people believe that you should live within your means, then deposit the rest into a savings account. What I do though, is different. I have created a budget, and always put money into a savings account first, then live off of the rest, simply because it forces me to look for special deals, and motivates me to be thrifty.
Saving for 6 months to a year is not realistic to most people. the majority cannot save for a few weeks. A better focus to have rather then saving is investing. You can invest by opening a family business locally. It is so easy to start a business now a days. My mom makes most of her money selling banana bread items such as banana bread ice cream and cup cakes to go a long with other things. She's making a living off of that, but she also works at her regular job. So saving is not an issue anymore. She has about twice the amount of money coming in as she would with her business. Possibly more. I know she's doing well. I'm not sure exactly, her sales might be higher then I think. Being creative is a key factor in starting a home business.
I like to have 6 months in savings of living expenses (about $20k) just in case. Once I achieved that I added $1k per month to my savings account and used the other $1k to invest and make my money work for me. I had a hard time saving for awhile but once I got going it was easier because I could see progress and that served as a great motivator for me.
There is a need of being decent and sensible with setting a budget so from them we can get to have a good amount of everything which moves ahead and that is quite fine.Till the time the actual growth of it and things that lets us do better are the ones which are pretty useful.
12 months is too much for an emergency fund. 3-4 months is what you should be able to have as easily liquidated. As in, beyond that, the money can be invested instead. Put it to work for you, earning you more money. If you actually end up needing it, you can pull it out with a penalty price, so it's not like you're wasting it. It shouldn't just be sitting in a random savings account, though.
I can't really set a price at what I can store away for emergencies, as there are usually small emergencies all year round. I just make sure that I always have a little extra on the side. The more the better.
There's never an amount of cash which you'd say is "safe savings." Life happens and you'd see all your money spent in less time than you planned. That's why instead of targeting a certain amount of money you need to save within a specific period of time, it's always better to have just a little saved and invest the rest of the money so that you'll always have some income [returns on investment] instead of relying on savings should anything happen.
Well, my income is pretty low so I can't really save that much even if I want to, not unless I want to starve to death or live on the streets. But I do save for emergency. I had a financial freedom account on which it automatically deducts a certain amount of money from my account every month, I usually put in $200 on that account every month. I also have a coin jar for my spare change tucked under my bed.