BOSTON (CBS) – Think about stashing those dollars in an emergency fund.

This is your cash stash, set aside for an emergency. And we all know bad stuff happens. Stuff we never planned for. So your best defense is having cash available to get you through.

And no one will argue with me on this point. We all agree a cash stash is a good idea. But only about half of our listeners have cash that could see them through an unexpected emergency.

This Cash Stash is not your vacation fund or Christmas club. This is “you are out of work and need to pay the mortgage” money. It’s only to be used for a true emergency.

Like if we have a snow storm, we lose power, work is closed for over a week and you stay in a hotel until the heat is back on at your house. Oh, and then you need to replace all of the food in the freezer and refrigerator.

So how much do you need in your Cash Stash? Figure out how much you need for living expenses each month, not the extras, the basics like the mortgage, insurance, gas, food etc. Everyone’s will be different. But the following should help you figure it out:

Bare minimum for everyone:  3 months of living expenses
Children & 2 steady incomes: 3-6 months of living expenses
Children & 1 steady income: 4-6 months of living expenses
Children & no steady income: 6-9 months of living expenses

No-steady-income are those who have seasonal jobs like landscaping or get paid by earning a commission such as real estate agents.

A money market or savings account is a good place to stash your cash. I realize they are not paying a lot of interest but you have access to the money, which is the important thing.


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