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Which is it supposed to be-6 months of mortgage payments or?
6 months of total living expenses? I hear different things and would like to know what most people have/are working towards? I am leaning towards total living expenses because if you have your house paid for what good is it if you can't keep the lights, water, etc. on.
3 Answers
- OthnielLv 61 decade agoFavorite Answer
If I understand your question you are thinking what do you need if for some reason you lost your income and would have to survive until you found new employment. Logically you are right. It would be 6 months or more of living expenses.
Of course, you would cut down on some expenses such as eating out and gas for commuting and that may work out to give you more than six months of living expenses.
I hope that you are able to achieve this goal and I also hope that you will not need that money in the near future.
- STEVEN FLv 71 decade ago
You have NEVER heard anyone with ANY qualifications say 6 months mortgage payments. The 'normal' statement is your emergency fund should be 3 to 6 months expenses. Recently, many advisers have changed to 6 to 8 months or more.
The important concept is you are buying TIME to replace your income. The question is how much time do you need to buy.
- ?Lv 71 decade ago
Emergency savings should currently be one year of total living expenses. The one year is due to the high rate of job loss and the amount of time it takes to find a new job.
