The Hernandez family is experiencing some financial pressures, even though the couple has a combined income of $66,000. Also, their eldest son, Joseph, will start college in only three years. Maria is contemplating going to work full time to add about $25,000 to the family's annual income.

How will this change in income affect the family's emergency fund needs?

Doesn't all this depend on many other factors?

~ What are the "financial pressures" they are facing? Large credit card debt? Large rise in housing costs? Or what?
~ How many other children do they have?
~ If there are young children in addition to Joseph, how much will they end up paying out of her salary for child care?
~ Is that $25K a gross or a net figure?

... and on and on ...

To determine how a change in income will affect the family's emergency fund needs, we need to consider their current financial situation and the impact of the additional income.

1. Assess the current emergency fund:
- Determine the current size of their emergency fund. This fund typically needs to cover 3-6 months' worth of living expenses.
- Calculate the total monthly expenses of the Hernandez family, including housing, utilities, transportation, groceries, debt payments, insurance, and any other essential bills.
- Multiply the monthly expenses by the number of months they want their emergency fund to cover (e.g., 3 months for a conservative estimate, 6 months for a more cautious approach). This will give you the target emergency fund amount.

2. Evaluate the impact of additional income:
- Calculate the annual income after Maria starts working full time. Add the $25,000 increase to their current combined income of $66,000 to get the new total income.
- Assess how this extra income will affect their monthly budget. Take into consideration any additional expenses that may arise due to Maria's full-time work, such as commuting costs, work-related expenses, or childcare expenses.
- Recalculate the new monthly budget based on the updated income. Subtract the expenses from the new total income.

3. Adjust the emergency fund needs:
- With the new monthly budget in mind, recalculate the target emergency fund amount by multiplying the updated monthly expenses by the desired number of months (3-6).
- Compare the new emergency fund target with the current emergency fund size. If the target is greater than the current fund, the family may need to increase their emergency savings.

Remember, these calculations provide a general guideline, and each family's situation may vary. It is always wise to consider other financial aspects, such as outstanding debts, financial goals, and potential changes in expenses, to make an informed decision.