How much emergency funds does a person actually need

[jamesbond]

A lot of Americans have NO money saved at all for emergencies. You really need to have at least 6 months worth of emergency funds in the bank at all times.

[youtube]https://www.youtube.com/watch?v=_MO28oMcgFo[/youtube]

[xiongmao]

This always scares me.

I hate having no cash, so at the moment I have 6.5 years worth of rent stashed away.

[Falcon]

As much as possible. At least $10,000 USD if you are traveling abroad to an affordable part of the world, and much more than that for developed countries.

[Contrarian Expatriate]

That depends. Does the person have debts, a mortgage, a car payment or is he debt-free?

Typically, one should have a reserve of funds to survive 6 months without any income. That is a tall order for most, but a worthwhile goal in case you get sick, get fired, or have to Go Ghost abroad.

[Falcon]

It would be good idea to be debt-free, rent cheap places, and buy cheap used cars using cash. You never know how long you're going to stay in a certain country, so it's best to be liquid. You really have to have capital and also maintain it while you are abroad. Capital is needed for emergencies, investments, visas, and so many other things. Do not blow your capital.

Put your money in high-yield savings accounts that offer 1% interest rates, such as Ally Bank or American Express. Keep in mind that interest is compounded. CD's also give 1%, but they are not liquid, and work like bonds. Stocks, bonds, index funds, and mutual funds are also good ideas if you have extra cash and are willing to take some risk as well as lose some liquidity. Keep multiple bank accounts. Be liquid, flexible, diversified, frugal, and cautious. Save as much as possible and as early as possible.

Before you go abroad, be sure to take a look through financial services offered by Fidelity, Charles Schwab, Vanguard, T. Rowe Price, and other financial companies.

[xiongmao]

Or you could be like us Europeans and go for yield... My portfolio currently returns 8.5% annually.

It took me decades to get good at investing, so start as soon as you can.