No. of Recommendations: 0
My husband and I were at a very similar crossroads last year and I have to admit that the couple of years it would take to accumulate a decent emergency fund seemed like a great deal of lost time to us. What we did was allocate a monthly amount to the emergency fund. When it gets to 6,000 we'll stop. That could take upto three more years because we are investing some of our cash now as well! We have about another 300-500 a month to invest and so far we've been making 5-7% a quarter on these monies. If we didn't invest we figured it would have taken a total of two and a half to three years to accumulate the fund instead of the four it will now take because we are diverting money to invest.

I don't know if all the Fools out there would agree with this approach but we feel it has been a good compromise for us.
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