How do you figure out how much money an emergency fund should have?

Hi! I am working on a case study. I have a couples financial info, and I am trying to figure out how much money they need in an emergency fund? Do I count mutual funds as liquid? What about money in the checking account? (I know I count the money market funds.) Thanks for the help!

How do you figure out how much money an emergency fund should have?
I have and tell people to have enough liquid, readily available cash to pay your expenses for six months.





Mutual funds--not liquid. Checking/Savings --liquid. Money Market--liquid. Certificates of deposit--Not liquid.





Think of liquid as being guaranteed available without substantial penalty or loss of capital equity.
Reply:3 months of total costs..inc housing, car, insurance, food etc..yes mutual funds can count as liquid..alot of them act like checking accounts.
Reply:I think emergency funds should be atleast your 6 months earning as in case of any problem you have ample of time to set the things right.
Reply:3-6 months income in accounts that can't lose money (aside from withdrawals of course) This includes checking, savings, money market accounts etc.
Reply:I've always heard that 3-6 months of average expenses should be on hand in case of emergency. This does not count Mutual Funds or other investments or retirement accounts, but does include checking.


Hope this helps.