How Much Should Your Emergency Fund Be?

The standard recommendation is 3–6 months of essential living expenses. However, the right amount depends on your specific situation. Consider saving more if you are self-employed, work in a volatile industry, have dependents, or have variable income.

Where to Keep Your Emergency Fund

  • •High-Yield Savings Account (HYSA): The best option — FDIC insured, liquid, and earning 4–5% APY.
  • •Money Market Account: Similar to HYSA with slightly different features. Also a solid choice.
  • ✗Stock market: Never keep your emergency fund in stocks — they can drop 30–40% exactly when you need the money most.
  • ✗Checking account: Earns little to no interest. Keep only 1 month of expenses here; the rest in a HYSA.