Guide section
What emergency cash protects you from
Unexpected expenses can force you into bad timing decisions like selling investments during a drawdown or taking on expensive debt.
Cash reserves give the rest of the financial plan room to work.
Guide section
How much to hold
Three to six months of core expenses is a common starting range, but the right target depends on income stability and overall household risk.
The best number is the one that materially lowers stress and bad financial decisions.
Bottom line
Where this guide should leave you
Cash reserves support investing discipline. They are not a drag on the plan when they prevent bigger mistakes elsewhere.
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