It's my understanding that the ideal amount of money to have in an emergency fund would be enough money to live on for three months.

Hi ladies! I'm Brandie Farnam and I'm one of the LV Financial Planners. LV recommends having six months net income in an emergency savings account, but remember this is not an overnight process - so be sure to start with a mini goal for yourself and work towards that in stages!

Your emergency fund should be in a savings account, not invested. If you want to save for other short-term goals, consider an online savings account like ING Direct or Ally which allow you to set up sub accounts for different savings goals like a down payment or travel.

The second part of your question really depends on your individual financial situation. Both are really important, so without knowing more about your finances, I'd advise you to split the money between the two goals. And as you pay down your credit card debt, start with the highest interest rate card first.

If you would like personalized advice based on your financial goals, consider one of our financial plans!

Hope this helps!

I have a budget but seem to always fall short and have to dip into the little savings that I have. My question is should saving be a priority and pay less on my unsecured debt? Should I focus on paying off unsecured debt quickly or saving so that I do have 3-6 months of income. Thanks!

I've read LV's recommendation for 6-9 months' expenses in an emergency fund. Is this for all existing monthly expenses or only those that LV classifies as necessary expenses in its budgeting tool? On the one hand, groceries are not classified as a necessary expense in this tool (which is odd), but funding all expenses seems like overkill because many could be cut or eliminated in an emergency.