Two ways to size an emergency fund: pick a round number that feels safe, or save three to six months of living expenses. Which one you choose depends on your job stability, health, and how many dependents you have.
The first thing we want to do is calculate your personal buffer. Now there's 2 ways you calculate your personal buffer. The first way is a gut feeling exercise where you might sit there and go, if I just have $5K, $10K, $20K, $50K, $100K, whatever your figure actually is, this is a shit happens buffer. Does that make sense? Some people, it's more of a calculation, and in that calculation, it's a number of months of living expenses that you need set aside or access to in one way, shape, or form. If something happens to work or life or health or family, you might sit there and go, what I need is that I need 3 months or 1 month or 5 months or 6 months or 12 months of living expenses set aside that I can sort myself out. So choose one.
