3 Reasons to Beef Up Your Emergency Fund

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Here's when you may want to boost your cash reserves.

As a general rule, it's a good idea to have enough money in your savings account to cover three to six months of essential bills. That way, you'll be less likely to land in debt when unplanned expenses or circumstances arise.

If you already have money in an emergency fund, you're off to a great start. But if these scenarios apply to you, you may want to make an effort to sneak a little more cash into your bank account.

1. You've just purchased a home

The great thing about renting a home is that your monthly housing expenses are pretty predictable. You simply pay your landlord the amount of rent you owe as per your lease, and that's it (though you may have a monthly renters insurance premium to cover as well).

When you own a home, there are many variable costs that come with it. And maintenance and repairs can do an especially good job of throwing your budget off course.

You never know when you might encounter a costly situation, like a leaky roof or malfunctioning heating system, which costs thousands of dollars to fix. Generally, that's money you'll have to come up with right away. You can't just let a roof continue to leak and you can't go months without a way to heat your home. And that's why homeowners are generally advised to have healthy emergency funds -- because you just never know when something might go wrong.

2. You have an older car

When you buy a new car, you're generally given a warranty that protects you from major repairs for the first three years or 36,000 miles of driving. Some vehicle owners are also able to purchase extended warranties that offer added years or miles worth of protection.

But if you have an older vehicle, you may want to put some more money into your emergency fund. If your car is more than seven years old, it's probably not covered by a warranty, and if you're hit with a costly auto repair, as is the case with a leaky roof or non-working heating system, it's not the sort of expense you can put off. It's smart to have extra money in savings to either pay a mechanic's bill or put a down payment on a replacement car.

3. You're getting a bad vibe on the job security front

If your company is experiencing financial woes, your job could be on the line -- even if you're a hard worker with a great reputation. If you have any reason to believe that you may soon be out of a job, it's a good idea to pad your savings as quickly as you can. While you'll generally be entitled to unemployment benefits if you lose your job through no fault of your own, those benefits won't replace your whole paycheck, and you may need to lean on your savings for a while to stay afloat.

Normally, having three to six months' worth of living costs in the bank will put you in a pretty solid position to withstand some financial upheaval. But if these situations apply to you, it wouldn't hurt to beef up your savings. Even a small boost could go a long way.

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