Six months worth of expenses

One of my basic financial principles is to have at least 6 months worth of your expenses in the bank. These funds should be easily accessible - i.e. not in an IRA or a CD.

When you’re calculating how much you need for your emergency fund, add up your necessary expenses. You can skip things like cable TV, starbucks, and eating out. If you’re in a tough financial situation, you can cut back easily in those areas.

The 6 month fund is designed to keep your head above water if you lose your job. The last thing you need during a job search is scrambling to pay rent and feed your family. You should be able to fully concentrate on finding the right job.

I’m still working on this goal, unfortunately. My monthly expenses are much higher than I’d like for the time being, and that’s making my goal fairly difficult. Are you working towards this goal? Have you reached it yet?