Sometimes life throws you a curve ball. You lose your job, your car transmission goes (this happened to me for a total cost of $3200) your washing machine dies. These events happen all the time.
An emergency fund protects you against these things by allowing you to dip into your savings to pay for them instead of going deeper into credit card debt.
The experts disagree on how much you should stash away. They say anywhere from 2 to 8 months of living expenses should do the trick.
For example if you have a freelance job that pays you different amounts each month you probably want to have 6 to 8 months of living expenses saved. If you feel your job is secure then you may only have to put away 2 to 3 months of expenses.
According to Dave Ramsey, you should start with $1,000 in your savings. On top of that I feel you should have $1,000 as your average checking account balance. This may help you from living paycheck to paycheck.
You may find it difficult or easy to build up your emergency fund, but you will sleep better at night with the savings in place in case something goes wrong.
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