How much cash reserve do I need to keep in the bank?

How much liquidity (cash) should I have available? Is it one month expense, 2 month expense, or something else?

How much cash reserve do I need to keep in the bank?
It's totally up to you. Most planners recommend 6 months. I usually recommend 12months; Why? Because you just never know how life is going to go for you.





Having 12 months of living expenses, means you are always in control. So if you lose your job (or quit), involved in an accident, or need to look after a relative (or other loved one) you can take the time you need to look for another job when you are ready- no pressure to take the first thing because you need it.





ANY emergency fund is a good one, the more you have the more flexible you can be, and yes it means other things are being left out - like retirement etc.





Consider this: Put away as much as possible to get 3 months of emergency funds - now you have a base. Halve the amount you were putting away until you reach 6 months - now you have a better base. Now halve the amount again until you reach twelve months.





Anything more than twelve months would probably be overkill - at least for an emergency fund. 'Most emergencies' would be over within 3 to 6 months. There 'MAY' be the odd 6 to 12 month emergency - like a disaster - take Katrina for example - You just never know.





You can visit my website, where you can get a free budget planner.





Good Luck!
Reply:6 months worth. It could take you a while to find another job if you get terminated.
Reply:Enough to pay all your expenses for 2-3 months.
Reply:at least three months emergency cash..

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