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My husband and I have a *slight* disagreement on how much to set aside for emergency funds as well as where to "park" these monies.

He: Thinks six months' expenses is overkill. "We can always use our home equity line of credit in an emergency (no balance currently). Six month's expenses is a lot of money that could otherwise be invested for a better return in stocks."

I: Think six months' expenses is a lot to park, as well, and believe perhaps three months' would be enough for us. (We have no debt besides our mortgage and could get by on one income if either of us were to suddenly lose our job.) BUT...I think the money should go into a money market account, NOT stocks.

Proposed compromise: We are leaning toward socking away about three months' expenses in a tax-sheltered money market account (Vanguard has one for PA residents), and relying on the equity line of credit (with low interest) to cover any emergency expenses above and beyond that sum.

What do you experienced Fools think? How much do we really need to set aside? Three or six months? Or..??? Is it OK to rely on a low-interest line of credit as part of an emergency strategy?

Looking forward to your replies,
Jen
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