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In arecent Instagram post, she shared tips for managing your emergency fund, including when to use it.
How Much Should Be in Your Emergency Fund?
Cruze recommends having three to six months worth of expenses in your emergency fund.
For single people withno financial dependentsand a steady income, Cruze recommends saving three months of expenses.
According to CEIC Data, theaverage monthly incomein the U.S. is $4,865 in 2024.
When Can You Use Your Emergency Savings?
Cruze understands the temptation of pulling money from your emergency fund.
However, she wants to challenge savers with these three questions before making a withdrawal from their savings accounts.
Is It Unexpected?
Your emergency fund is for expenses you cant anticipate.
For everything else, theres your budget.
Ramsey Solutions recommends saving money for significant expenses that arise irregularly but predictably.
Examples includecar insurance premiums, property taxes and even holiday gifts.
If you could predict an expense, divide it into monthly installments and add it to your budget.
Is It Necessary?
Something isnt an emergency if you’re able to safely ignore it.
Before you use your emergency fund, ask yourself what will happen if you dont.
If your car needs repairs and you cant get to work without it, dip into your savings.
Its not an emergency if the car still runs but the radio is crackly.
Is It Urgent?
By definition, emergencies are both necessary and urgent.
If you need something that can wait, its not worth dipping into your emergency fund.
Instead, start putting money aside and earmark it for that need.
And of course, theres always theclassic spreadsheet methodfor tracking your savings.
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