Get Your Financial Life Together - Erin Lowry, Author of the Broke Millennial series
More Money Podcast
The Problem with the Prevailing Wisdom on Emergency Savings
The prevailing wisdom of having at least $1,000 set aside in emergency savings may not be enough to cover basic living expenses, especially in high-cost areas. It is important to assess one's own circumstances and determine the bare essential living expenses for at least one month. This exercise allows individuals to gauge their risk tolerance and adjust their savings goals accordingly. Using a standardized dollar amount fails to account for individual cost of living and circumstances, leading to potential financial strain and debt. Thus, it is crucial to use oneself as the benchmark for emergency savings rather than relying on arbitrary guidelines.
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