Experts now recommend a 12-month emergency fund. Here’s how to quickly save thousands in cash.
Economists worry a recession will start in the next few months. There’s still time to beef up your emergency fund by thousands of dollars with these aggressive — but temporary — changes.
By
Venessa Wong
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Published: April 12, 2025 at 10:00 a.m. ET
As economic uncertainty rises, some financial planners suggest bumping up emergency savings to cover 12 months of necessary expenses — and to do it quickly.PHOTO: MARKETWATCH PHOTO ILLUSTRATION/ISTOCKPHOTO
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Many personal-finance experts were already warning that a cash emergency-savings account covering three months of necessary expenses in case of unemployment was likely too little for today’s job market —
recommending a six-month buffer instead.
Now, as President Donald Trump’s tariff plans increase economists’ expectations of a recession and sent the Nasdaq
COMP
+2.06%
and Russell 2000
RUT
+1.57%
stock indexes dipping into bear-market territory last week, some financial planners are suggesting bumping up those savings to cover a whopping 12 months of necessary expenses, and say it needs to happen quickly — especially if you are in an industry or occupation that has few job openings or are the sole earner in your household.
Moody’s Analytics Chief Economist Mark Zandi put the chance of a recession at
60% even after Trump announced a
90-day pause on “reciprocal” tariffs for dozens of countries. The markets rebounded briefly this week, but if the president doesn’t change course on tariffs in the next four to six weeks, “we’re done,” Zandi told MarketWatch. “I suspect by June, we will see job loss.”