Message Font: Serif | Sans-Serif
No. of Recommendations: 0
6 months is the conventional wisdom for what that is always worth. I believe the emergency fund should be the household expenses over the period of time it would take you to find a new job. But certainly, the expenses can be typical expenses or necessary expenses. The latter is always far more. Further, if you are quite secure in your job you can probably go with less of a cushion.

Historically, there has never been a bad time to buy stocks. Never rush to buy them and never use any money you might ever need.

I would definitely put the first 3 months of any fund into a money market account at a well secured instituition. Beyond that you could certainly put funds above 3 months in expenses in a 3 month CD. Or a short term bond fund (the stb fund is much more liquid). Investing the emergency fund in any stock or long term bond product is just fooling yourself.

If you feel you need to "be in the market" and are secure in your jobs then maybe you should put 3 months away and start an automatic withdrawal for $100-$300 a month into that account. Don't stop the auto withdrawal until you get to 6 months or whatever point you think appropriate.


Print the post  


TMF Credit Center
The Motley Fool Credit Center arms you with real tools and simple messages, that will help you in every credit situation.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.