[Thread merged into here, see below. --admin LadyGeek]
This study actually used some real statistics to come up with a number
https://www.cnbc.com/amp/2019/10/18/min ... -fund.html
Less than $2500!
That will make some Bogle*heads* explode. Granted this is only for the lowest earning 30%tile.
So, when helping out someone less fortunate we should probably refrain from the usual 3-6 months (and more for many Bogleheads) and stick with roughly 1 month - a much more manageable amount, and apparently nearly as effective.
Money quote (literally):
"$2,467. If you have that much saved, your probability of falling into financial hardship (not being able to pay rent, bills or medical care) is low.
To get to that number, Gallagher and Sabat, who are also assistant professors of finance, used data from the Survey of Income and Program Participation (SIPP) to graph the relationship between falling into hardship in the next six months and how much you have saved as a buffer. They looked at financial information on more than 70,000 lower-income households, which the report defines as those earning under 200% of the poverty line. To put that into context, that's up to about $30,000 a year for a family of four, says Gallagher. This group represents "about 30% of the U.S. working-age population," she adds.
They found that if you have very little saved — say $200 to $500 — each additional dollar you set aside dramatically reduces your likelihood of falling into financial hardship. But once you have at least $2,467, "all of a sudden, saving an additional dollar didn't seem to be that helpful anymore," says Gallagher. "It still reduced your probability of falling into hardship a little bit, but it wasn't nearly as effective as when you were at low levels of savings.""