4 Lifestyle Changes That Should Cause You to Increase Your Emergency Fund

Saving money in a high-yield savings account for emergencies can do more than just give you peace of mind. If you have funds put aside for a rainy day, you can avoid a huge financial disaster if things don't go your way.

Most experts recommend you have enough emergency savings to cover three to six months of living expenses, but that's a pretty wide range. And there are some circumstances where you might want even more money ready for a rainy day. Not only that, but the amount that you should have in your emergency fund could potentially increase in certain circumstances, so it can become even more complicated to figure out just how big your fund should be.

If you're not sure if it's time to grow your own emergency account balance, watch out for these major lifestyle changes. They could mean it's time to start putting away more cash in case of an unplanned expense.

1. Taking on a big new expense

Most experts recommend having an emergency fund big enough to cover three to six months of living expenses. So if you have a big new recurring expense, that's a situation where you need more emergency money.

Say, for example, your mortgage payment used to be $1,200 a month, but you bought a larger house and now your monthly payments have gone up to $3,000. Since your mortgage payment is $1,800 higher per month, if you wanted three months of living expenses, you'd need to add an additional $5,400 to your emergency fund. If you wanted six months of expenses, you'd need to add double that.

Remember, your emergency fund is specifically designed to ensure you can fulfill your obligations if something goes wrong -- so be sure you're updating the amount saved when you have new commitments.

2. Your partner stops working

If you have a spouse or partner and you currently share household expenses, then even if one of you lost your job or could no longer work for some reason, you'd still have the other person's income coming in.

If your partner leaves the workforce, that's a different story. Now, you have the only income coming into the home, so if you also stopped working, you'd have nothing to cover the bills. You'll want to increase the amount you have saved for emergencies to account for the fact that the risk is far greater when there's only one breadwinner.

If you have three months of living expenses saved right now, you might want to up that to six months. Or if you have six months saved, then perhaps nine or 12 would be better. This will give you more of a cushion to find a new job or get back to work despite having no other income if something goes wrong.

3. A serious medical diagnosis

Medical expenses cause about 66.5% of bankruptcies, which isn't surprising. Getting medical care is very expensive in the U.S. even with insurance, and having serious medical issues could also make it difficult to earn a living.

If you get a serious medical diagnosis, this increases the chance you'll face high costs and an income loss. If you can, it's important to increase the amount of your emergency savings ASAP. You may even want to aim to double the amount you have saved, because the chances of an emergency that impacts your personal finances is so high.

4. Increased instability in your career

Finally, if your career becomes less stable and there's a greater risk of you losing your job or seeing a decline in income, you should bulk up your emergency fund. That way, you'll be more prepared if a job loss actually does happen sometime soon. Think about how many opportunities are available in your industry and how long you're likely to be out of work and make sure you feel confident your emergency savings will provide enough to cover you.

If you have any of these four lifestyle changes, start working today on growing your emergency savings. You can set up automatic transfers with the bank to send cash from your checking account to your high-yield savings account until you have the funds you need to be prepared for any emergency that comes your way.