We keep a $1000 emergency fund, but we also have about 6 months expenses worth in investments, that we would prefer not to touch, but will if absolutely necessary. I think 3-6 months is a good amount.

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~Vicki~
Mama to Hailey, 4 and Ella, 2

I think 3-6 months is a good amount. We have about six months worth or a bit more.

We keep it at a different bank that is hard to access for day to day purposes and it earns the highest amount of interest I could find in a MMA.

I think that the amount of emergency fund you need depends on the type of work you do. If your job is easily replaceable maybe you don't need quite as much.

For example, we are a single income family and my DH is a computer programmer, so quite often is employeed via a contract than full time position. Being on contract pays more, but isn't permanent (but really what job is anymore) and doesn't offer medical coverage. You really never know how long the contract will be and once it's done, it's not like you can apply for any employment benefits etc.

We are in that position now. His contract is up so we will be living off of our savings. Fortunately we lived within our means when he was being paid, and were able to save one year of savings.

However, we HATE spending the savings! That's what they are there for but we plan on being even more frugal until the next job comes along. Cross your fingers for us!

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With our income tax refund, we prepay all of our utilities for the year and our car insurance for the year.

With the remaining, I divide it into CD's. I "purchase " one 12 month CD each month with the leftover money from the taxes and I also dump the change into the coin counter and put that in their as well. If we need the money, it is there each month, if not, it "rolls over ". This is also a way that I learned from my grandmother to save for retirement. She can cash a CD if she needs the money, otherwise it rolls over.