Larger emergency fund?
Don and his wife work for the same company. Because of this, should they have a larger emergency fund? Dave has the answer.
QUESTION: Don and his wife work for the same company. Because of this, he asks Dave if they should have a larger emergency fund than normal.
ANSWER: No, I don’t see a reason to set aside more than six months of expenses. My recommended range for an emergency fund is three to six months of expenses. If your employment situation is one where there’s more risk, you should lean toward saving six months of expenses. If your employment outlook is stable, you can go with setting aside three or four months of expenses.
I look at your situation as being more high-risk. You each have jobs, so that’s good. But if the company went down, you could both find yourselves unemployed. My advice would be to save up six months of expenses for your emergency fund. With that kind of cash just sitting there, you should be able to handle almost any kind of scenario.