How Much Is An Emergency Fund?

It was inculcated on my mind that I need to save enough money for the rainy days. Rainy days are times for future financial need, mostly unexpected events where money requires to spend for.



Since then, I learned to save. Every time an extra dime or more comes in a handy, I usually keep it in my clay  jar bank and break it when it is full to deposit in a bank. When I started working, ATM or electronic banking makes it easier to save in just few clicks.


So I did save a lot! (At least based from my age 10 years ago :-) )
Then came the unexpected situation when I need to withdraw a large sum of cash. Whoa! The money that I put away solely for rainy days like this one...is merely NOT enough!

This dire straits I experienced disheartened me from things I needed to accomplish especially the outgrown means of saving. The BIG question is... how much should I save?!



Thanks to the Suze Orman Show, it was just an accident I tripped to channel surfing one tiring Saturday afternoon. Amazed on how she discussed how to put up an emergency fund, I tried doing it on my own.

Here's How:
I sum up my total monthly expenses with estimates that should be close higher to the actual expenses.

Electricity - 7,000
Water - 2,000
Groceries - 35, 000
Kid's allowance - 5, 000
Transportation/Gas - 5, 000
Entertainment - 2, 000
Cable/Internet/Phone Bills - 3,000

Total of 59,000. And to save an Emergency Fund, multiply it by 8. I need a liquid savings amounting to 472,000.

A liquid savings is a cash you stashed that whenever needed, it can be easily withdrawn. Example is a savings deposit account thru banks.

The idea is that you have at least 8-months liquid savings in a bank where you can easily withdraw it; for an instance that you lose your job.