Q: What is your recommendation on how much someone should have in savings? Is it better to save in a traditional savings account OR money-market account? What are the pros & cons?
These are good questions, so let’s start with the first one. A good general rule is to keep at least three month’s worth of living expenses saved up. Of course, if you don’t have a savings account yet you have to start somewhere.
The first goal then would be to build up $1,000 to put in savings for an emergency fund. You could do this by selling items around the house, pulling what you can from checking, and cutting back on non-essential spending like eating out or shopping for a while.
This $1,000 will be your first line of defense in the case of an emergency, like a car repair or a trip to the doctor. It can be frustrating to have to spend this hard-saved money…