For years I have said that everyone should have an emergency savings fund that could cover eight months of living costs. I didn’t need a severe recession to know what it takes to protect you and your family. Even back in the “good old days” (say back in 2006) when most “experts” were telling you all you needed was three months of savings, I was telling everyone that eight months of savings was true protection. And it’s not solely about protecting yourself from a job loss—though with unemployment over 8% it should in fact be a major concern—but also giving yourself an emergency cushion for when any of life’s “what-ifs” strike.
You never know when there is going to be a serious illness or accident that you have to deal with; or an ailing loved one that you need to care for. The only way to handle those “what ifs“ is to have an emergency savings fund. I have said it for years, and I say it now. You should have an emergency savings fund that could cover eight months of living expenses.