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If you’re saving up your full emergency fund, that means you’ve already saved up your mini-emergency fund (the $1,000) and you’ve paid off all your consumer debt!

Great job!

Now, with all of your newfound cash flow each month, it’s time for you to put that money straight into a savings account for your FULL emergency fund.

Most experts say you should have 3-6 months’ worth of expenses in your emergency fund. So, if it costs you $3,000 a month to live, then you should have a savings account that’s somewhere between $9,000-$18,000.

It’s a lot of money, but it’s necessary if you want to be secure in your financial journey.

I admit, this isn’t the most exciting step, but when your car breaks down or when you have an unexpected medical emergency, you’ll be glad it’s there!

Want to learn more about building up your full emergency fund? 

Check out the helpful posts below!

Questions about Step 10?


  1. We have $20,000 set aside. We’ve never had to touch it, but it always feels good having it there! I’m sure we’ll need it someday!

    What’s your number? How much do you need in your emergency fund?

  2. Well, I’ve read that you should have 3-6 months of savings but this pandemic showed us that that may not be enough. Hate to say this but $20K is not enough to cover even 1 year of rent in NYC, so for rent plus bills I’d say I need at least $40K to live for 1 year

    • Ooo yeah, NY…that’ll eat up your emergency fund quickly! But, maybe if you have a room mate or a way to bring down the bills a little bit, then you could live on less, pay off your debt faster, and then you also wouldn’t need that big of an emergency fund (since your monthly bills are less)! Just some ideas. I hope your brain is churning like mine is! 🙂

    • Same here, I don’t think $20K is enough for a year of living expenses here in CA. The cost of living here is high, whether it’s renting or buying property. Probably if it’s feasible, having a roommate to split the rent and bills would help offset the living expenses to create more room for savings.

      • Oh those expensive locations…! Maybe you all want to move to the mid-west! 😉

  3. Our fully funded emergency fund is $10k. Obviously in an emergency you bring everything to a halt with a minimum. We had to do that a few times in 2020, and are so grateful we had the emergency fund.

    Remember, an emergency fund works in conjunction with your other defenses like good insurance with stop losses.

    • Absolutely. Our emergency fund is $20,000. Thankfully, we haven’t had to test it out this past year, but it’s good knowing it’s there if we need it!

  4. Derek, I have been following you for a while now and want to thank you for all of your great ideas, inspiration, and motivation. We have made a lot of mistakes along the way but you have provided some great resources to help people at every stage of their financial journey. As we near retirement age we have no consumer debt and a decent emergency fund. We just got approved for a refi. on our mortgage and as you advised we will throw all that we can towards the principal and our retirement savings. I will continue to follow your awesome journey. You are doing very well at your age and I hope that other young people will heed your advice.

    • Thanks for the complements, Carlyn! I just love to help!

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