Personal/household Rainy day fund - how many month(s) of household expenditure do you put aside for it?
To avoid this thread turning into yet another bragging thread, let's keep the dollar amount out of it. And this thread is also not applicable to those RFD elites who have 1million+ net worth. This thread is for those working & middle-classes households who still need to budget their monthly expenditure. As per the thread title, how much do you put aside for rainy day fund (liquid cash) in terms of the number of month(s)?
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.
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.