Tue June 12, 2012
How Much Should You Save For A Rainy Day?
Originally published on Wed June 13, 2012 10:09 am
The most important reason Americans save money: To have something salted away for a rainy day.
When researchers asked people the most important reason they save money, building an emergency fund finished slightly ahead of retirement and way ahead of everything else.
This raises a second question: How much do you need in a rainy day fund?
Lucky for us, the researchers asked this question as well. Not surprisingly, people with higher incomes said they needed a bigger emergency fund.
But up and down the income spectrum, people said a rainy day fund should be between 9 percent and 14 percent of their annual income.
In other words, most people think they need a bit more than a month's worth of income saved up for a rainy day.
Planet Money Question of the Day: How much do you think you should have saved for a rainy day? (Also: How much do you actually have in your rainy-day fund?)