You are building your emergency fund and are writing down your monthly expenses:
Expense Amount
Rent
\[\$1{,}400\]
Utilities
\[\$380\]
Car payment
\[\$525\]
Insurance
\[\$140\]
Groceries
\[\$820\]
Phone & internet
\[\$135\]
TOTAL
\[\$3{,}400\]
Your goal is to have three months’ worth of expenses in the emergency fund.
How much money should you have in your emergency fund to meet your goal?
\[\$\]
To meet the goal of having three months' worth of expenses in the emergency fund, you would need to have 3 times the total monthly expenses.
Total monthly expenses = $3,400
Emergency fund goal = 3 x $3,400
Emergency fund goal = $10,200
Therefore, you should have $10,200 in your emergency fund to meet your goal.