Depending on our tolerance for risk, three months, six months, or a year’s worth of living expenses may be our objective for saving money in an emergency fund. Generally, banks and credit unions are safe places to keep this money, but look for opportunities to earn more than these financial institutions pay on demand deposit accounts (like checking or savings). Check out what’s offered in U.S. Treasury Securities, CDs and money market mutual funds. Once we’ve established an emergency fund we’re ready for alternative investment opportunities.
Chris Bryant is an American financial advisor.