Question

Once you're out of school, have started your career, and have zero debt, your emergency fund should have:

a) 3-6 months of living expenses
b) 6-12 months of living expenses
c) 12-18 months of living expenses
d) 18-24 months of living expenses

Answer 1

The recommended size of an emergency fund for a person who has started their career and has zero debt is to have 3-6 months of living expenses saved.

Step-by-step explanation:

Once you've started your career, have zero debt, and are thinking about savings, most financial experts recommend that your emergency fund should contain 3-6 months of living expenses. This recommendation falls in line with the idea that unforeseen circumstances such as job loss, major repairs, or unexpected medical bills can quickly deplete your savings, which underscores the importance of a substantial financial cushion. The goal of an emergency fund is to provide stability and security, ensuring that you can cover essential costs without going into debt during challenging times.