My emergency fund should cover several months of my basic expenses, but I keep questioning how much cash I should actually keep outside my investments.
I understand why an emergency fund needs to be easily accessible. At the same time, keeping a large amount in cash means that money isn't invested for the long term.
The difficult part is deciding where that balance should be. If I keep too little, an unexpected expense could force me to sell investments at a bad time. If I keep too much, I may be holding more cash than I realistically need.
I know everyone's situation is different, especially depending on income stability, monthly expenses and other sources of cash.
**How do you decide how much money to keep in cash versus investing it?**