How Much Should Be in Your Emergency Fund?

Everyone talks about emergency funds—especially Dave Ramsey—for a few very important reasons: they help keep you out of debt, give you a safety net, and provide you with reassurance. Your emergency fund is there to help protect you from whatever comes your way. What could have easily been a financial disaster with maxed out credit cards and loans quickly becomes an event that you can handle, all because you had the foresight to save. 

So, let’s talk about emergency funds—what qualifies as an emergency, and how much should you save?

What qualifies as an emergency?

Emergencies vary from person to person, but most simply, an emergency would apply to an unexpected event that affects your life drastically. A few examples of emergencies are car accidents, injuries, necessary home repairs (e.g., leaky roofs, broken A/C or heat), or losing your job. If an unexpected event comes along, your emergency fund would be there to catch you until you found your footing. In short, an emergency is any situation that would typically put you in debt or financial stress and would keep you from comfortably paying your normal living expenses. 

How much should be in your emergency fund? 

The amount of money you should have in your emergency fund also varies from person to person, like anything in finance; however, there are a few guidelines that you can follow. 

If You Have DebtIf you have debt, start by saving a one-thousand dollar emergency fund. The primary function of this initial fund is to prevent you from losing steam as you pay down debt. For example, if you’re making good progress on your debt payments, but your car needs a repair, you would use your emergency fund rather than charging the repair to your credit card and losing some of your progress and motivation. 

If You Are Debt-FreeIf you are debt-free, it’s time to build your emergency fund with three to six months’ worth of your living expenses. The difference in amounts depends on your circumstances and your financial stability. For those with steady or dual incomes, you likely need three months of expenses because you have less risk than someone who is self-employed, works on commission, or has one income. The people in the latter category should save six months of expenses to be on the safe side. Dave Ramsey also suggests that those who are taking care of a loved one with costly medical expenses save six months of expenses, even if they have a steady income and can afford the expense.  

The Key to Financial Security

Talk to your financial advisor about debt-free living, emergency savings, and financial confidence. Your advisor acts as an ally who understands your personal and professional goals, designing a sensible financial plan to help you get there. The Dobyns McMillin Wealth team is dedicated to helping our clients lessen financial worry and feel financially independent. We are here to welcome you into the SageSpring Wealth Partners’ family. Are you ready?  

Contact us to schedule an appointment with your local Franklin advisor.

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Jeffrey T. Dobyns


President, SageSpring | Financial Advisor, RJFS 

Jeffrey T. Dobyns

President, SageSpring | Financial Advisor, RJFS

Beyond crunching numbers and investment strategies, at SageSpring, we’re about building relationships. When you encounter Founder & President of SageSpring, Jeff Dobyns, it’s easy to understand why this is at the very heart of who we are as a firm. You won’t find stuffy formalities with Jeff; instead, you can expect to find him sharing a warm smile, communicating a compelling vision, or patiently untangling life’s complex challenges with clients. He believes in truly getting to know clients, understanding their aspirations and priorities, and navigating their financial plans with a tailored, comprehensive approach. Our team members have often been caught taking notes on Jeff’s effortless relationship skills from a distance, and we admire them for striving to learn from one of the best. 

Jeff’s financial expertise and wisdom are the perfect match to his innate people skills. Jeff holds the prestigious CERTIFIED FINANCIAL PLANNERTM certification, Chartered Life Underwriter (CLU®), and Chartered Financial Consultant (ChLU®) designations, and has held executive positions with financial planning firms for more than two decades. 

His dedication extends beyond the office to the boardroom and the local community, where Jeff is passionate about giving back. He serves as Chairman of the Board of Men of Valor, a prison ministry and mentoring program. Jeff also serves on the board of Send Musicians to Prison, which shares hope, healing and restoration with the imprisoned through musicians & artists. Jeff actively supports other initiatives in the community by sitting on the board of The Signatry of Middle Tennessee and the Halftime Institute of Nashville. 

Witnessing his four children, Gracyn, Hunter, Tanner, and Logan, excel on the field is almost just as rewarding, if not more, than celebrating the victories of seeing his clients overcome obstacles and build wealth. Spending weekends boating on the lake, hiking mountain trails, and fishing with his family are the moments Jeff cherishes most. It’s this grounded perspective that reveals the true meaning of wealth for Jeff: not just numbers on a page, but the freedom to create experiences that enrich your life and the lives of those you love. When you choose the Dobyns McMillin Wealth Team, you choose more than financial expertise. You choose a partner who champions your dreams, celebrates your victories, and walks besides you on the path to achieving your unique goals.

**Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER TM, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.