Here's How Much 5 Financial Experts Say You Should Have in Your Emergency Fund

Opinions range from as little as three months of living expenses to as much as one year's worth.

An emergency fund is one of the first and most important steps toward financial security. You can't always predict when you'll have money troubles, like an unexpected home repair or a job loss. If you have emergency savings, you can get through these issues without going into debt.

So, how much should you save in your emergency fund? For years, the standard recommendation was three to six months of living expenses. If you need $2,500 per month for necessary bills, then your goal with this method would be a savings account with $7,500 to $15,000.

That's no longer the consensus. Some financial advisors started recommending larger emergency funds because of the pandemic, inflation, and a potential global recession. To help you decide how much to save, here's the latest emergency fund advice from five popular financial experts.

Dave Ramsey: Three to six months

Although Dave Ramsey tends to be conservative in his financial advice, he hasn't changed his stance on emergency funds. He recommends you first save $1,000 in a starter emergency fund. This is the first of his 7 Baby Steps, a system designed to help consumers improve their financial situation.

The next step is to pay off all debt, except for your home. After that, he advises saving three to six months of expenses for what he considers a fully funded emergency fund.

Suze Orman: Eight to 12 months

Suze Orman changed her mind on emergency savings this year. She previously suggested the standard three- to six-month emergency fund, but she increased that recommendation because of the pandemic.

She now encourages everyone to have at least eight months of living expenses in their emergency savings and to eventually aim for 12 months' worth. That amount will give you much more protection if you're jobless for an extended period, or if you go through an injury or illness.

Ramit Sethi: 12 months

I Will Teach You To Be Rich author Ramit Sethi is another financial expert who updated his emergency fund advice during the pandemic. While he used to believe that three to six months of living expenses were enough, he now says you need a 12-month emergency fund. This is even the first of the 10 money rules he lives by.

Mark Cuban: 12 months

Billionaire entrepreneur Mark Cuban has always erred on the side of caution when it comes to emergency funds. Before the pandemic, he recommended a six-month emergency fund. In 2020, he said that everyone needs 12 months of emergency savings because of the uncertainty caused by COVID-19.

Graham Stephan: Three to six months

Real estate investor and YouTuber Graham Stephan has stuck to the traditional guidelines for emergency funds. He says you should always have an emergency fund that can cover three to six months of living expenses. If you take his advice, you may want to aim for the high end of that range, as he has also said that having a six-month emergency fund is "a literal superpower."

It may be time for a larger emergency fund

How much you have in your emergency fund is a personal decision, and there's no one-size-fits-all answer. But based on the economy and what the experts are saying, it's a good idea to reevaluate your emergency savings.

The standard advice of three to six months of living expenses isn't quite outdated. However, it is on the low side, especially if you go with a three-month emergency fund. If you lose your job, three months can fly by. To give yourself more financial security, a six- to 12-month emergency fund is a good way to go.

That's a lot of money to save, and it may seem like a lofty goal. While it takes time, what's important is saving consistently. Set up an automatic transfer to your emergency fund account for an amount you can afford. Building an emergency fund can be a lengthy process, but it's well worth it for the security it provides.