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Financial Planner: Expert Money Advice

My Savings
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Bryan McCay

Q. How much should I have in savings?

A. At least six months of living expenses. The general rule of thumb has always been that dual-income families should have three to six months of living expenses accessible in a savings account earning at least 2.5 percent. But fewer than 40 percent of adults have enough savings to tide them over for even three months, according to And now that the economy is so uncertain, experts are leaning toward six months. "If someone loses his job, it's anybody's guess how long it will take to become employed again," says Donald E. Whalen, a certified financial planner in Alpharetta, Georgia. But don't get overwhelmed by the thought of having to save so much money -- "living expenses" doesn't mean cash for leisure activities. It's the money needed to cover bare essentials, like mortgage, food, and health insurance.

To beef up your emergency fund:

A. Set up a weekly automatic debit from your checking account into a high-interest savings account, and increase the amount when you can.

B. Raise the deductibles on your home and auto insurance, or shop around for a better deal, then stow the difference in a savings account.

C. When you finish paying off a credit card, keep making payments -- to your emergency fund.

D. Try bundling expenses (like getting phone, Internet, and cable from one company) then stash the savings.