I think it's useful to think of your emergency fund in two ways. One, how many months of regular expenses could I cover (emergency: job loss). Two, do I have enough money to pay for an unlikely significant event (emergency: major car trouble, major health situation, major legal expense). Since I started thinking this way I have been building my e-fund up, I want enough in there to cover a new car + 3 months bare bones budget, which would be close to $10k. At some point I will need a new car and that will go down to $3-5k, which I would still be comfortable with. I also have a $10k credit line I can draw cash off of at about 10% interest, if I needed to.