Originally Posted by kablooey
I have been setting aside a small amount of $ each month for a rainy day fund. It's all going into a government-backed, but low-interest account.
Is there a rule of thumb as to how much I should have in there in terms of monthly expenses? I've gotten a lot of contradictory advice.
The fund I'm creating will be used in case I, say, get hit by a car and can't work, or someone breaks into my apartment and steals a lot of valuables, etc.
1. Traditional rule of thumb is six months worth of average living expenses to deal with unemployment / loss of income.
2. Getting hit by a car leads to medical expenses which is something you should seek to cover by insurance, not savings.
3. In general, personal financial planning does not cater to theft scenarios. I would suggest a good padlock, perhaps a CCTV, a burglar alarm system etc.