Reply to How Do You Think I Am Doing -- What Should I Do Differently?

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[quote=Anonymous]When considering an emergency fund, think about what types of emergencies would need to happen for you to use it.  Then weigh your risks of those emergencies happening.  For example, typical uses for an emergency fund are:

job loss
major illness
death of a breadwinner
natural disaster (think Katrina)
perhaps car accident
major home repair

Now what are the risks of these happening?  Do you have a steady job in a good field?  Have you been there a long time?  If you lose your job, how marketable are you?  Could you find one prety quickly?

Are you generally healthy?  Do you have good health insurance coverage with low copays?

Do you and/or souse have life insurance?

Do you have good insurance on your home incase the unexpected happens like a tree falling on the roof? or Hurricane Sandy happens?  Do you have family nearby where you could stay?

Are the major parts of your home up to date like the HVAC, the roof, etc or do they need replacing soon?

Is your car insurance good if you are in a major car accident and need to buy a new car?

Of course emergencies cannot be predicted or they wuldn't be emergencies, but you should have an idea of how well covered you are if something catostrophic should happen.

If you have good healt insurance, good property casualty insurance, are generally healthy, your car is newer, the major components of your house are newer then 6 months' is probably enough.  If you have poor health, bad health insurance, a job that is going nowhere and no seniority and an older home that needs lots of replacements, then you should probably have a year or more.[/quote]

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