Fundamentals of Investing: An Emergency Fund
It is important that you see yourself as a company with a structure from earning money, to saving it, to budgeting for expenses and then investing. There should be room for liquidity first. The first step of creating an emergency fund is to try to estimate what your monthly expenses are. Your yearly rent should be factored too, divided into 12 and added to that estimated monthly expense, if you want to go overboard, you can assume you would be leaving the current place you stay in and add expenses for an agent fee or other house expenses associated with getting a new place. Divide this by twelve too and add it to the initially estimated expense.
