If you ever lose your job, an emergency fund can help you stay afloat while you look for a new gig. There are some additional expenses you have to pay for when you lose a job, though. Don’t forget to budget for these when building your fund.
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Most experts say you should sock away at least a few month’s worth of living expenses in case of an emergency. As the Motley Fool points out, it’s easy to miscalculate how much you’ll need, though.
For example, if your employer pays for your insurance premium, don’t forget to factor in the additional expense of paying for your own plan if you lose this perk. Your work might offer other perks, too, like reimbursement for transit.
The Fool also points out that your communications costs — mobile phone and internet service — might be more expensive when you’re unemployed, too. You may need more minutes for phone interviews, for example, or you might need a better data plan for your home internet.
These are just a few examples and they offer more at the link below. In general, though, you want to think about what kind of perks you would lose and what additional costs you would incur from being at home.
Are You Forgetting to Save for These 3 Things? [The Motley Fool]