How big should your Emergency Fund be?
A question I frequently get asked by clients is, “How large amount is sufficient for an emergency fund?”
And my answer has always been that there’s no fixed number.
Why?
Cause each of us has different levels of responsibilities, ambitions, and of course, debt.
For a person who has a house or car loan and needs to pay fees for kids, his emergency fund amount will vary significantly as opposed to a person early in his career without any responsibilities or debt.
However, here is a brilliant broad-scale framework you can use to approximate your emergency fund amount.
Cheers!
End-Week Wisdom:
"To obtain financial freedom, one must be either a business owner, an investor or "You only have to be able to evaluate companies within your circle of competence. The size of that circle is not very important; knowing its boundaries, however, is vital.” - Warren Buffett
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