I’m not talking about that pair of shoes that just went on sale. That’s NOT an emergency.
Why: Like I said, I’m talking about real emergencies. For example, I’ve been towed… twice. That was $50 each. Or when it’s that time of the month and you are completely out of tampons… AND you get paid next week. That is when an emergency fund comes in handy.
How Much: Well, that depends on you. I’d suggest $100. Ideally, even if you have to break into the emergency fund, you will have a little left over. Of course, don’t forget to replenish the emergency fund the next time you have some spare cash.
Bottom line: Being prepared is the way to go. Chances are that nothing will go horribly wrong, but better safe than sorry.