"Is $1,000 enough for an emergency fund?"

62% of Americans have less than $1,000 saved.

For the majority of Americans, having $1,000 in savings would be a huge relief. As we look at long-term goals, we need to ask ourselves if $1,000 is enough to propel people through their consumer debt payoff. My answer is: maybe.

When I developed the 9 Moves system, two things that I wanted included in the plan were structure and fluidity. I know that everyone's finances are not the same, so it didn't make sense to choose a single value as it would not fit everyone's lifestyle or liabilities. It is for that reason Move #3 of the 9 Moves system is save 5% of your net annual income.

This scale of 5% puts everyone on level playing ground. Generally speaking, if you are entering into a debt payoff, the more income you have, the more liabilities you will have. If a family makes $70,000 net per year, they are probably going to have more liabilities and need more protection than a family that makes $30,000 per year.

For those families I mentioned above, their Move #3 savings goals would be $3,500 and $1,500, respectively. Each family can reach their goals in a similar time frame and have a similar level of security.

Dave Ramsey has instructed people for years that $1,000 is enough for their starter emergency fund as it is Step #1 of his baby steps. I have met with many people who have walked through Dave's plan and almost all of them said that $1,000 was not enough to sustain them while they were working through consumer debt. Some families had a debt payoff plan of four years; surely an emergency of more than $1,000 will come up in four years, through we hope it does not.

I think a savings scale based off a percentage makes more sense than just a fixed number. Everyone's situation is different, so everyone's financial plan should look different. That is why we have sliding scales wrapped in Moves #3, #5, and #6. These scales are more customized to your life and fit into what your current situation is. Everyone needs to have savings and shockingly well over half of Americans have less than $1,000 in savings. Equally shocking is that over 75% of Americans living check to check. We hope to change that, one family at a time.

I write this not to start an argument over which plan is grounded in more reason. I write this to get you thinking about your finances, how much savings you will need to work through your consumer debt, and what your ultimate goal with your finances is. The entire 9 Moves program is available at RobTalksMoney.com/9Moves (for free) and RTM Solutions (my company) can help you get on a plan and get started in the right direction.

We don't charge people who are around or below the poverty line and 100% of our individual online services are free to those who are in that bracket. Thanks for following along.