If you are trying to plan your savings, don’t forget to put away something for your emergency fund, which is a savings account which you can access during financial emergencies. Usually, the emergency fund should be worth six months of your current salary. Unfortunately, this amount is unrealistic
for most households. So how much should be kept in your emergency fund. Here are some factors to consider when deciding:

If you are worried about the stability of your income, specially during these trying times, then you ought to put away more for your emergency fund. Try to budget rent or mortgage payments, utilities, groceries, loans, and other financial obligations for several months just in case.

Check your insurance policy if you have one. You may base the amount of your emergency fund based on the deductables indicated in your policy. It should be equal or close enough to it. Consider also the number of people in your household. Multiply your medical insurance deductable by the number of people in your home. This includes pets because you are going to pay for vet bills if the need arises.

Do an inventory of your household appliances. Total their prices. Your emergency fund should cover the amount needed to replace them or to have them fixed. Include to this amount the repair costs and the regular maintenance of the vehicle that you own, and the amount you need to pay for repair costs of your home.  Don’t forget the tools of your trade, especially if you are self-employed. By this we mean money for replacing or repairing computers, cell phones, etc.

Don’t worry overmuch about a fixed amount. The important thing here is that you are made aware of how much your household is spending. Plan your budget carefully and be diligent. Over time, you’ll get to have more than the ample amount stashed in your emergency fund, and you’ll be thankful that you saved enough for the rainy days.