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Comment by aadillpickle | Hacker News Reader

You're a 100% right - having an emergency fund is extremely important and I'd like to add an appendix that mentions it - do you have any good resources for learning about what goes in to building one?

I didn't comment on it because I'm living at home right now and am young/commitment-free enough to move back in with my parents if I ever need to - I don't have one so I feel I'm not qualified to discuss it.

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It's simply just putting money into a checking or savings account that you use to cover unexpected expenses. The amount varies by your life situation and risk tolerance, but a couple months salary is a good start.

Think of the sort of "adult expenses" your parents have - refrigerator failed and too expensive to repair, need to buy a new one - that will be $2,000, right now. My teeth need to be fixed - that will be $3,000. It's winter and the furnace broke - that will be $7,000. You want to be able to have the money on hand to deal with those situations. Those were not random examples - those are things that have come up for me in the last two years

You probably shouldn't have more than a few hundred dollars in an emergency fund if you're paying off high interest loans (10%+)

Typically it’s as simple as saving cash enough to cover 3-6 months or unexpected expenses. Fixed income investments are almost so low as to be ignorable but you can put it in a high yield online savings account. The key is for it to be liquid.

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