How much should you save in an emergency fund?
user
I don’t have a good formula for this, but I would use the 4% rule for determining a practical minimum, which is:

•    Save at least 4% of your income.

•    This means saving 4% of your gross income, or, if your income is at the higher end of your income range, at least 6% of your gross income.
assistant
Ok so I should try to start putting 4 percent aside as an emergency fund right now?
user
That’s the general recommendation, yes.
assistant
That sounds reasonable. Thank you.
user
That’s an interesting idea, but I’d like to double-check and be sure I’m not missing anything. I looked it up and the formula you mentioned was proposed by Dave Ramsey. It’s similar to the rule of thumb for your savings percentage, which is:

•    The bare minimum is 10%, but you’ll probably do better with 15%, 20%, or even 25%

•    The longer you can wait to start saving, the more you can save

•    Some experts recommend saving 40% or more
assistant
How much should you save in an emergency fund?
user
I don’t have a good formula for this, but I would use the 4% rule for determining a practical minimum, which is:

•    Save at least 4% of your income.

•    This means saving 4% of your gross income, or, if your income is at the higher end of your income range, at least 6% of your gross income.
assistant
Ok so I should try to start putting 4 percent aside as an emergency fund right now?
user
That’s the general recommendation, yes.
assistant
That sounds reasonable. Thank you.
user
You’re welcome.
assistant
How much should you save in an emergency fund?