I want my emergency savings to last me at least 6 months of living expenses if I lose my job or am unable to work. I calculated it by adding my rent, eating. and living expenses. Of course if I do lose my job, I will cut down on living expenses, but I wanted to have some sort of buffer to give me more room to breathe.
My Emergency Savings or I sometimes like to call it my Rainy Day Fund.
I calculated it this way:
I took my recurring expenses which I calculated earlier and multiplied it by 6 months. This gave me a total of $8,078.58. Then I gave it a bit of a buffer in case of unexpected expenses and just rounded it up to $10,000. That should give me more than enough buffer. Who knows what can happen. Getting new tires, for example, can run more than $500 and that is a possibility so I figured that around $2k of room to breathe will make me feel better.
My current emergency savings is at: $6,500.
I am $3,500 short of hitting my goal. I plan to hit $10,000 by the end of this year: Dec. 31, 2010. That gives me 3 months to save about $1,166 a month. Updates will be up soon.
How much are you saving for your Emergency Savings (aka Rainy Day Fund)?