Need ways to budget, save, and simplify in these stressful times? Start here with our on going series over the next few months where we will cover some common questions with a plan of action.
Money Matters – Make Peace With Your Money
Q. I need a bigger cash cushion in case I lose my job. How much is enough and how do I get there?
A. With the unemployment rate hitting double-digits in the US today and job searches taking more time than they had been, it’s no longer enough to keep just three months worth of living expenses in your emergency fund. The new goal: six months’ worth, and as much as 12 months if you have kids or rely on one income. If the budgeting strategies previously mentioned won’t get you there quickly enough, you may need to take more drastic action, like temporarily redirecting 401(k) contributions that you’re making. In the meantime, a home-equity line of credit can be a backup plan – if you have sufficient equity.
Keep six months of cash in a high-yield savings account and any additional emergency money