NFL linebacker Brandon Copeland made $990,000 in the NFL last year, according to CBS Sports — but that’s not even close to the most fascinating thing about him. He has also built a financial empire called Copeland Media, where he is CEO and oversees the company’s financial advisory firm called Cascade Advisory Group. While attending the University of Pennsylvania, he interned at UBS and has since returned to his alma mater to teach a financial literacy course. And two years ago, he added an editor at Kiplinger to his resume.
One of his tips that seems particularly relevant now – as a recession may be looming and some savings accounts are paying more than they have since 2009 (see the best savings account rates you can get now here ) – is this: you need an emergency fund. Here’s what he advises on the matter, along with what other experts are saying.
“A healthy emergency fund typically contains three to six months of salary or living expenses, but as always, you should assess your situation and save as much as you reasonably can,” says Copeland. (Copeland himself reportedly saved the majority of his own salary.) He notes that an emergency fund can help with medical issues, job loss, paying off our debts, and more.
What the pros say about an emergency fund now
Certified Financial Planner Danna Jacobs of Legacy Care Wealth agrees that an emergency fund of 3-6 months worth of expenses is an essential foundation for a healthy financial home. “We usually put those savings into high-interest savings accounts so our clients can earn a bit more on those funds,” says Jacobs. See the best savings account rates you can get now here. See the best savings account rates you can get now here.
Jacobs says if you’re a two-income household, you can usually target a smaller emergency fund since you have extra income to support a potential job loss. But those with dependents, less stable jobs, or just one income may want to save more.
“Having a substantial amount of cash to draw on provides such flexibility, and there’s real peace of mind knowing that everything will be fine when disaster strikes,” says Certified Financial Planner Keith Spencer of Spencer Financial Planning. , who notes that it is better to err on the side of money rather than too little.
If the recommended amount of reserves seems unfeasible for the household, certified financial planner Paul Collinson of Legacy Planning Advisors recommends dividing the amount into feasible plots. “Perhaps aim to accumulate a month’s supply every 3-6 months until the recommended number of months is reached. The context is that it is important to hold household members accountable when setting ‘ambitious goals, such as when building up an emergency fund over a period of months or years,’ says Collinson.
And note that this number can be fluid. “If you’re paying for childcare right now, it would definitely be included, but in a few years it might not be necessary,” says Certified Financial Planner Cristina Guglielmetti of Future Perfect Planning.
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