Ace the IB Adventure 2025 – Your Passport to Success Awaits!

Question: 1 / 400

What is the standard for emergency fund size once out of school?

One month's worth of expenses

Two months' worth of expenses

Three to six months' worth of expenses

The correct choice expresses the widely accepted guideline for how much an individual should consider having in an emergency fund after finishing school.

Having an emergency fund that contains three to six months' worth of expenses is advocated by financial experts as a safety net to cover essential living costs in case of unexpected events such as job loss, medical emergencies, or other financial crises. This range is deemed effective because it provides a substantial buffer, allowing individuals time to seek new employment or recover from unforeseen circumstances without facing immediate financial distress.

A fund of this size is significant enough to cover various emergencies without relying on high-interest debt or depleting savings too quickly. This approach promotes financial stability and peace of mind, making it a sensible recommendation for those transitioning into the workforce or managing their finances independently for the first time.

Get further explanation with Examzify DeepDiveBeta

Seven months' worth of expenses

Next Question

Report this question

Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy