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Possible Duplicate:
As a general rule, how much in “liquid” emergency savings should I have?

I recently started my first job and now have more money than I've ever had in my life (woohoo!) However I am curious how much I should keep in checking or savings accounts (i.e. things which can easily be converted into cash) instead of investing. Is there a rule of thumb?

I pay about ~40% of my salary in rent, but am in good health and don't have any amazing debt or payment obligations.

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marked as duplicate by Chris W. Rea Mar 27 '12 at 11:57

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In personal finance circles this is called an Emergency Fund. There are many opinions about how big it needs to be but most seem to come in around 3-6 months worth of your average expenses. Any more than that and you're going to loose money to inflation, less and you will start having problems if you get laid off or have a medical issue.

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  • +1, but this is assuming there are no debts outstanding. – MrChrister Mar 27 '12 at 8:02

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