Life is full of surprises, some pleasant and others not so much. As a financial advisor, I’ve navigated through many of these surprises myself - buying a home, welcoming two children into our family, adopting two pets, and experiencing multiple job changes between my wife and I. Through it all, one thing has remained a constant safety net: our emergency fund.

An emergency fund is a stash of money set aside to cover the financial surprises life throws your way. These unexpected events can be stressful and costly. Here are some of the top emergencies people face: job loss, medical or dental emergency, unexpected home repairs, car troubles, unplanned travel expenses, and legal issues.

So, how much should you have in it? While the rule of thumb is to save 3-6 months’ worth of living expenses, the exact amount can vary based on your personal circumstances. Remember, building an emergency fund isn’t a sprint, but a marathon. It’s okay to start small and increase your contributions over time. Every little bit helps!

Having an emergency fund provides a sense of security and reduces stress knowing you’re prepared for unexpected expenses. However, having more than enough isn’t always beneficial. Excess money in your emergency fund could be invested elsewhere for better opportunities.

As for where to keep your emergency fund, it should be easily accessible, but not too accessible to be tempted to use for non-emergencies. High-yield savings accounts, money market accounts, or short-term CDs can be good options. You might wonder, why not invest in stocks? While stocks have the potential for high returns, they also come with risk. The value of your investment could decrease, and you could lose money at the time when you need it most.

Remember, everyone’s financial situation is unique, and what works for one person may not work for another. It’s important to consider your own circumstances and goals. As always, we’re here to answer any questions and discuss more with you, a member of your family, or even someone you know who might be interested in our help. Your financial well-being is our top priority.

Merriweather Money Management, LLC is not a registered broker/dealer and is independent of Raymond James Financial Services, Inc. Securities offered through Raymond James Financial Services, Inc., Member FINRA/SIPC. Investment advisory services offered through Raymond James Financial Services Advisors, Inc.

Opinions expressed in the attached article are those of the author and are not necessarily those of Raymond James. All opinions are as of this date and are subject to change without notice. Prior to making an investment decision, please consult with your financial advisor about your individual situation. The forgoing is not a recommendation to buy or sell any individual security or any combination of securities.