Do You Have Adequate Resources For Emergencies?
Life changes quickly, and the unexpected frequently occurs. Financial planning textbooks often suggest that you should set aside cash equal to six months worth of your income.(9) The reality is that many doctors and dentists do not keep that much in reserves. Rather, most of our physicians maintain about two to three months worth of monthly living expenses in a checking account or money market fund. For additional emergency reserves, they rely on a home equity line of credit, four-day access to their investment funds, and/or an unsecured line of credit. The first key to a long-term successful financial life is access to adequate resources for emergencies or opportunities.
9. Altfest, Lewis J. Personal Financial Planning. Boston, MA : MacGraw-Hill Irwin, 2007.