Financial Fragility

There is some scary news in a recent paper that has been published by the National Bureau of Economic Research and is all over the blogosphere and other news outlets. Big surprise, right? 

The survey question: If you were to face a $2,000 unexpected expense in the next month, how would you get the funds you need?

The response: In the U.S., 24.9% of respondents reported being certainly able, 25.1% probably able, 22.2% probably unable and 27.9% certainly unable.

Yikes. Just scary. Financial fragility. 

Personal finance gurus recommend saving at least 3 to 6 months of expenses in an emergency fund. In her newest book, The Money Class, Suze Orman recommends 8 months of expenses. With our "new economy", I don't think 8 months is unreasonable at all. It could easily take that long to find another job. Your comfort number depends on your situation. Are two people working, or just one? What are your liabilities? Do you have family that could easily loan you money during tough times?

How is your emergency fund? Would you be able to get your hands on $2,000 in 30 days? Without borrowing from your 401K or selling things you own? Or using a credit card?

We recently tapped our savings to pay off a car loan (2 years early!) and have just a few months of expenses in savings. While I know it's more than many people have, it's not enough for me. I want to have at least 8 months. J-bird is the only one working, we have liabilities (car loan, student loans, mortgage). 8 months of expenses is our next financial goal. What is your next financial goal?