Ask any financial advisor about emergency funds, and they’ll say two things. One, these savings are essential if you expect to have any financial security. And two, you should save three to six months of living expenses in this fund.

For decades, the three-to-six months rule has been a popular tenet of emergency funds. It’s been told to any risk-averse person concerned about their finances — whether you’re a startup entrepreneur or stay-at-home mother of three.

However, this rule could be reaching the end of its life. Popular finance advisor and TV personality Suze Orman thinks it’s not enough to keep people financially safe.

How Much Should You Save in an Emergency Fund Instead?

If three to six months of living expenses aren’t enough to ensure your financial security, what is? According to Suze Orman, you should try to double this goal.

Orman, a self-made millionaire who has been sharing personal finance advice since the 1980s, has always been more cautious. Previously, she recommended the average person save eight to 12 months of living expenses in an emergency fund.

More recently, Orman has gone on record to say that her previous estimates aren’t enough for today’s high-risk economic landscape. With inflation’s ongoing impact on your budget and a possible recession arriving this year, Orman recommends saving 12 months of living expenses in your fund.

In a recession, you could lose your job, have to support a loved one who can’t work, and run into a medical emergency. A 12-month emergency fund gives you some breathing room to deal with expenses and find another job.

This 12-month rule isn’t exactly new. However, it’s gaining ground in the current economy. Her voice joins the chorus of conservative financial advisors who believe you need more emergency money.

What Happens if You Don’t Have 12 Months of Savings?

A whole year’s worth of living expenses is an enormous goal. But don’t worry — you don’t have to come up with it all at once.

The thing about emergency funds is that they’re created from small, consistent savings that build your safety net over time.

Until you save up enough to handle emergencies, consider getting a line of credit as a backup safety net. A line of credit is a flexible way to get the cash you need when you don’t have savings.

A lender like Fora makes it easy to research your options. All you have to do is visit Foracredit.ca to learn more about an online line of credit. If approved, you can tap into your line of credit if your emergency fund isn’t up to snuff.

Does Your Emergency Fund Need More Savings?

An emergency fund is personal. While the 12-month rule is here to guide you, there’s no perfect amount that works for everyone.

Here are some reasons why you might be more conservative with your savings:

• Your hours are unstable
• You work in a volatile industry
• You or your dependents have health issues
• You’re starting your own business

How Can You Jump-Start Your Savings?

Here are the ABCs of saving more:

1. Automate: You’ll never miss a contribution if you automate your monthly savings.
2. Budget: A budget lays out all the non-essential spending that could be converted into savings if you reduce or eliminate them.
3. Change Accounts: Move your emergency fund into a separate, high-yield account. This way, it’ll be off limits and earning more interest.

Bottom Line:

More could be better when it comes to savings. Keep this in mind as you automate your monthly contributions.