Very focused show today. We're going to cover three things. Number one, how big of an emergency fund do I need?

Specifically, how would I figure that out in sitting for the CFP exam.

Number two, where should I keep it?

And number three, what are the financial ratios

that I should apply to my household

to figure out if the household is running in a safe manner. Welcome to the Radical Personal Finance Podcast. My name is Joshua Sheets and I'm your host. This is episode

197. I'm going to share with you some information that you will need if you're ever going to sit

for the CFP exam, but it's also applicable to I don't know what should I

call us normal people who aren't CFPs the point is I'm going to give you the

technical answer today of how big of an emergency fund do I need

with just a little bit of an expansion for individuals.

You're ultimately going to have to be the person to decide for yourself how big of an

emergency fund that you actually need. It's a very individual decision. But there is a little

bit of technical formal guidance that we can give.

Specifically, this is the technical formal guidance that you would need if you were sitting for the CFP exam.

And this way of thinking, I believe you'll be able to find helpful to apply it to your life and think about the risk factors.

According to the CFP board, uh, board of, you know, their standards and their curriculum that they set out, or at least the way that you'll be tested on the exam.

The way that you find an emergency fund is somewhere between three and to either worth of expenses.

And so you total up if you are presented with something like a budget,

you total up all the fixed and variable expenses for a household.

And you're going to either choose a three-month emergency fund or a six-month

emergency fund.

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