Personal/household Rainy day fund - how many month(s) of household expenditure do you put aside for it?
So suppose your monthly expenditure is $3,000/month (including rent/mortgage, groceries & bills). If you put aside $6,000 in your rainy-day fund - you got 2 months covered.
I know there are lots of variables when deciding on how much you should put aside for the rainy-day fund such as job security, current & expected financial situation, life-changing events such as new car/house/kid etc. For me personally, I am trying to figure out how much I should put aside for a rainy day before putting the rest into long term investment and/or mortgage lump sum - basically defining a good balance.
Rainy day fund definition: a reserved amount of money to be used in times when regular income is disrupted or decreased in order for daily household operations to continue.