![]() If you’re in a stable, salaried position, you may not need as much cash but if you’re in a commissioned role, having more cash on hand would be wise,” says Spencer. “Your type of employment matters because it might make it more or less likely you’ll lose your job. The three primary things Spencer discusses with his clients when determining how much they need to have in an emergency fund are the level of income they have, the type of employment they have and the size of their housing payments. “You want to make sure you have enough to cover yourself if you lose your job for a while, have other unexpected expenses at the same time, make house payments to make sure you don’t lose your house and be ready for all of this during a stock market downturn,” says certified financial planner Keith Spencer of Spencer Financial Planning. Since pros like Orman and O’Leary don’t perfectly align on how much emergency savings you need, we asked some certified financial planners their thoughts. These do not have FDIC insurance and take an extra day or two to get your money versus a checking or savings account, but depending on how much you’re putting in, you’re receiving a decent return on your cash reserves,” says certified financial planner Spencer Betts. You might need to look at money market funds, but you can get 2% to 3% on your cash reserves. “With the Federal Reserve raising rates, there is interest in savings. To be fair, he said this back in May, and savings accounts are now paying more - see the best savings account rates you can get now here. “Right now in a bank account, you’re getting very little ,” he said in a CNBC interview. The reason O’Leary doesn’t recommend more? He says keeping large sums of money in a low-interest savings account is a big mistake. And Dave Ramsey’s guidance is that you should save roughly six months’ worth. For her part, Suze Orman recommends 12 months of expenses (not salary) in an emergency fund right now - a number she increased from eight months of expenses as a result of the pandemic.
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