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Your emergency fund should be tailored to your unique circumstances. For individuals with stable jobs, a 3-month buffer might be sufficient, whereas freelancers or entrepreneurs, facing variable incomes, should aim for 6 to 12 months’ savings.
Building Your Emergency Fund: Steps to Follow
1. Track Your Expenses
Understanding your current spending is vital prior to saving. Many people underestimate their expenditures, making it challenging to ascertain realistic savings goals. By tracking your everyday expenses, you can pinpoint areas for potential savings without drastically altering your lifestyle.