Is It Time to Rethink the Emergency Fund?
For the longest time in wealth management the recommended amount of money to have in an emergency fund has been three to six months of non-discretionary expenses (mortgage, rent, utilities, groceries). Typically, three months was the recommendation for a single individual or married couple with dual incomes. Six months was generally for married couples with one income earner. Every so often, something comes along challenging conventional wisdom, and that can be a good thing. In this case, it’s a pandemic that’s changing how we think – about many things. The pandemic has wreaked havoc on many lives. People have been laid off, lost jobs, are working less hours, losing income. Those with emergency funds have seen them dry up, and those that didn’t have them to begin with were worse off. For the future, it may be wise to consider a longer (more money) emergency fund. For example, we can […]
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