How much money to have in an emergency fund

Dear Dave Ramsey 


 In your Total Money Makeover book, you talk about Baby Step 3 as saving enough to have three to six months of expenses in your emergency fund. My husband and I were wondering how you can determine whether you need to be on the low end or high end of that range?


Answer from Dave Ramsey 

Lots of times in a marriage you'll have a situation where one person wants to save more, while the other is excited to move on toward investing. Technically, neither is wrong. So, the emergency fund really deals with someone's own personal level of peace. Remember Murphy's Law, and how it says that says if something can go wrong it will go wrong? Your emergency fund is “Murphy Repellent.” Some people just want to make sure he doesn't knock on the door, while others make sure he stays in the next county.

There are always practical considerations you can use to determine the amount of your emergency fund. If you both have very stable jobs, you'll probably be OK saving up three or four months of expenses. But if just one of you works outside the home, or if one is self-employed or on commission, leaning toward the six-month side is probably a good idea.

Of course, you can always compromise. Start out with three months but add a little every once in a while until you reach a point where you're both comfortable.

Read more: http://newsok.com/your-money-by-dave-ramsey-whats-your-emergency-fund-range/article/3643998#ixzz1nQcwBsmL


Personally  we err on the side of 6 months and I have even saved up 1 year of expenses now since my husband went started his own business a few years back.  I need a larger security blanket but I have paid off debt and need to know if (and when)  Murphy hits I don't need to pull out the credit card I can just look at my bank and say ok go take it.