If you are paying off debt still and you are riding your debt snowball downhill I recommend a minimum of $1,000. This will normally cover any sort of emergency, or at least a good portion of it. It should cover most car repairs, furnace repairs, house etc. That is just a minimum recommendation though. I highly recommend enough to cover most of your deductibles (health, auto, and any other type of insurance) with a little extra to spare.
My emergency fund has saved me several times. My car battery died at the end of the month where I had already used up my extra spending cash to buy some Christmas presents. I transferred the money to my main account and went straight to the store to buy a new battery. The same thing happened 1 month later when Brittany needed tires. The emergency fund should only be used for emergencies. Never use it to pay for vacations, buy toys, or anything that you could live without. Remember you need to make sure you have a house, food, transportation, and clothes before anything else. Make your priorities.
When you are done riding the debt snowball and all you have left is your mortgage or no debt well then it is time to really save. I recommend having at least 4 months worth of expenses saved up minimum. 4-6 months is best. Most will say 3 but I like to play it safe. Especially with the way the economy is. You never know how long it will take to get a new job.
Build it, enjoy it, and wipe away that stress of wondering "what if?"
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