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It’s important to have money in savings for unexpected bills and financial emergencies. You never know when you might need to spend money on a home repair, or when you might lose your job through no fault of your own. Having a solid emergency fund could make it so you don’t instantly need to reach for a credit card — and rack up a costly balance — when life doesn’t go your way.

As a general rule, it’s a good idea to have enough money in an emergency fund to cover three full months of essential bills. If you’re able to save beyond that point, even better. But seeing as how 63% of Americans don’t have enough money in savings to cover an unplanned $500 expense, according to a recent SecureSave survey, even hitting the three-month mark may be a stretch for a lot of people.

Meanwhile, you might have a fairly large savings balance to the tune of $20,000. That’s definitely a lot of money. And in some cases, that might constitute a really robust emergency fund. But in some situations, a $20,000 emergency fund might also leave you short.

Why $20,000 in savings may not be enough

Considering that so many people don’t even have $500 in savings, you may be wondering how it can be that a $20,000 emergency fund isn’t adequate. The answer is that it may be more than adequate for you. But it’s not necessarily adequate for everyone.

When calculating what you need to have in emergency savings, it’s important to add up your personal expenses. And if you happen to spend a lot of money on living costs, it’s possible that a $20,000 savings balance wouldn’t suffice in sustaining you for three months without a paycheck.

Let’s say your essential spending reads as follows:

$3,000 a month on housing, including your mortgage payment, property taxes, and insurance$1,000 on car payments and auto insurance$800 on groceries$200 on medication$600 on utilities$200 on cellphone service$1,200 a month on childcare

All told, you’re spending $7,000 a month on essentials. A $20,000 emergency fund might cover close to three months of bills, but you might come up a little short.

On the other hand, let’s imagine your personal spending on essentials amounts to half of that amount each month, or $3,500. In that case, you’re in excellent shape with a $20,000 emergency fund.

It’s all about you

One mistake people tend to make when saving for emergencies is landing on a random number and assuming it’ll work for them. It’s easy to see why you’d think a $20,000 emergency fund would be more than adequate. But if your expenses are higher than average, that may not cut it.

So spend a few minutes adding up your essential bills to see what your personal spending amounts to monthly. And then multiply that by three to get your minimum emergency savings target. It’s really that simple.

Of course, you may find that you have nowhere close to three months’ worth of bills in savings, and that’s not necessarily something to panic over, either. Building that safety net can take a lot of time.

But if you see that you have work to do, make a plan. Set up an automatic transfer to send an extra $100 a month into your savings from this point forward, or an extra $50 or $20 if that’s what you can swing. The key is to know what to aim for and do your best to get there.

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