What is the emergency fund? Emergency fund refers to the cash stash in which one will be able to tap on in the times of emergency. There is no need for one to borrow from the bank in times of emergency. People tend to assume that one should maintain six months of monthly expenses as emergency fund. Some indicated that it will be more appropriate for one to maintain 24 months of monthly expenses as emergency fund. There is no right or wrong answer to such question and it is entirely to the individual preference.
I maintain about eight years of emergency fund. You may find it to be extreme and unnecessary. I leave it to you to think about it. As I have mentioned it before, the number of months or year in which one prefer to maintain as an emergency fund is entirely to each individual. My preferred choice is eight years or 96 months. To each of their own.