The article emphasizes the necessity of maintaining a financial safety net through an emergency fund, particularly in light of unexpected expenses such as car repairs or medical bills. Financial expert Suze Orman now suggests aiming for a 12-month emergency fund instead of the traditionally recommended three to six months, a shift prompted by the financial instability seen during the pandemic. With changing economic conditions, ensuring one has adequate savings has become even more critical for managing both unexpected costs and potential unemployment situations.
It's for reasons like this that you need an emergency fund - money in the bank to cover unexpected expenses.
For a long time, experts used to suggest having a three- to six-month emergency fund. But recently, financial guru Suze Orman has been advocating a 12-month emergency fund.
My hope is that you work your way toward having enough set aside to cover 12 months of essential living costs.
In 2022, she updated her guidance on her blog to say that having a 12-month emergency fund is now more relevant than ever.
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