A household with an annual take-home pay of $120,000 a year needs how much in its emergency fund?

Question

Quizplus · Accepted Answer

Financial experts suggest having at least 3-6 months' worth of living expenses in an emergency fund. For a household with a $120,000 annual take-home pay, this would equal $30,000 to $60,000. However, since the question only asks for how much the household needs in its emergency fund (not the full amount recommended), the lowest option of $10,000 (which is still higher than option A and B) is the best choice.

A Household with an Annual Take-Home Pay of $120,000 a Year