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An Emergency+Fund is money for emergencies and other "just in case" situations - such as a new cure that is expensive and not yet covered by insurance or one that is only obtainable outside the United States. Your particular circumstances dictate the size of fund that is appropriate for you.

If you don't have the money on hand now, start building the fund a week at a time. Add as much as you reasonably can. Putting money into the fund is more important than an extra dinner out this week. Watching the fund grow will give you a sense of accomplishment -- and a feeling of control.

To help determine the ideal amount of your Emergency+ Fund, consider the following, each of which is discussed in another section of this document:

  • Your health status
  • The current status of treatments for your health situation
  • High-interest rate debt
  • Your access to credit
  • How comfortable you are with risk
  • Your insurance
  • Security of your employment status and the current job market
  • Your income source

Funds in an Emergency+ Fund should be invested in safe investments that you can access quickly. (For more information, see: How To Invest Money In An Emergency+Fund)

It is not advisable to use a 401K retirement plan, or any other similar plan, as part of your Emergency+Fund. Obtaining money from a retirement plan can be expensive because of penalties and taxes. If you cannot build an Emergency+Fund because of your contributions to a 401K or other retirement plan, consider reducing your contribution to those plans temporarily to free up the money you need.

An fully funded Emergency+Fund is a goal. Real life may intervene. Doing your best is good enough.

NOTE: If you prefer not to save at all, opting for the perceived pleasures of present consumption instead. While we do not recommend this approach, do what you are comfortable with. At least try to put aside something. If you are comfortable knowing that you have enough ready funds to go three months without income, but don't feel you need six months' worth, that's okay.


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