When it comes to saving money, you know having an emergency fund is important. It helps you handle unexpected bills and emergencies without dipping into credit.

But the question that’s harder to answer is how much savings you need to greet each emergency with confidence.

Well, wonder no longer. Here’s a quick guide to emergency funds, so you know how much you should have saved up.

What is an Emergency Fund?

An emergency fund is a dedicated savings account that helps when your expenses outnumber the cash you have on hand. You should use it to cover unexpected purchases, like unusually high bills or essential repairs.

An emergency fund is also there as a safety net should things take a turn for the worst. A well-developed fund will keep you afloat during layoffs, health scares, or even another recession.

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How Much Should You Save?

A popular piece of advice is to keep at least three months’ worth of expenses in savings. But this may not last through a sudden job loss or serious medical condition.

Some financial experts like Suze Orman suggest upping your goal to at least one year’s worth of expenses. This cushion gives you more room to recover.

Where you fall on this scale depends on a lot of things like:

  • The volatility of your work
  • Your income
  • Your expenses
  • Your risk tolerance
  • Your health

If you aren’t sure how much to save, remember this general rule: save as much as you can. When it comes to savings, more is always better.

How Do You Save That Much?

An emergency fund doesn’t happen overnight. It’s a slow process. Whether it’s three- or 12-months’ worth of wages, reaching your goal will take time.

The trick is to make consistent contributions to this savings account, leaving it untouched until a true emergency.

Although it may be tempting, don’t dip into it to pay for a vacation. If you start using it for non-emergencies, you could be left with nothing in your time of need.

The best way to keep to a consistent schedule is to automate your contributions. That way, you never have to think about saving again. More importantly, you’ll never forget to contribute.

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What if You Ever Fall Short?

In the best case scenario, you’ll have saved up enough before an emergency strikes. But you’ll have to consider the possibility you might not.

A series of unexpected bills may empty out your emergency fund, leaving you without any extra savings. If you face another bill or repair before you can rebuild it, you’ll need to look elsewhere for help.

When you’re in a tight spot, online personal loans can help you take on extra bills. These online loans are fast-acting. In some cases, you can get your personal loan online one business day after you’re approved.

Online personal loans are ideal for unexpected bills with urgent due dates, but they aren’t a permanent replacement for savings. Once you pay back what you owe in installment loans or lines of credit, you must make your savings a priority.

Life is rarely predictable. You could face an expensive auto repair, or you could get sick. You can be prepared for whatever comes your way even if you can’t anticipate what’s exactly in store.

An emergency fund is your way to face these unexpected costs without feeling vulnerable. If you save up enough, you won’t have to worry about how you’ll pay for unexpected bills, repairs, or medical issues. Although it may be a challenge, the financial security it affords is worth the effort of saving.