Seeing a great sale on shoes, or really wanting to buy tickets to a sporting event are not reasons for emergency cash funds.  Most investors realize that emergency cash funds are for exactly that, emergencies. These funds are saved in the event of someone in the household losing their job, or a significant health crisis that creates a financial burden, or a significant expense that cannot be avoided.

These emergency savings accounts are also the most common type of financial security tool that investors have, with 82 percent of wealthy investors indicating that they have an emergency cash fund, according to recent research from Spectrem Group. As investors get older, it becomes more likely that they have an emergency cash fund, with 88 percent of WWI investors and 84 percent of Baby Boomers having an emergency cash fund, while 77 percent of Gen X and 70 percent of Millennials have an emergency cash fund. For those investors that do not currently have an emergency cash fund, nearly half are at least somewhat likely to establish one in the future.

There are a variety of other tools available to investors pursing financial security. Financial plans are the second most identified tool in making investors feel at least somewhat secure, as identified by 78 percent of investors. A will and an estate plan are also helpful in bringing a sense of financial security to 71 percent and 68 percent of investors respectively. Life insurance purchased outside of their employer makes just under two-thirds of investors feel at least somewhat financially secure, while 61 percent of wealthy investors feel at least somewhat financially secure with long-term care insurance. Just over half of wealthy investors identify life insurance through work or a college savings fund as making them feel at least somewhat financially secure. When investors were asked to identify the single most important tool in making you feel financially secure, a third indicated it was a financial plan, while over half of wealthy investors feel an emergency cash fund is the most important in their financial security. With how important this tool is to financial security, it should be equally important to know how much should be in this emergency cash fund.

The amount that an investor has in their emergency cash fund can be significantly different based on their unique financial situation. Ninety-one percent of wealthy investors that have an emergency cash fund are comfortable with the amount they have. Knowing how much is “enough” is something that can be left up to interpretation as well. Over a third of wealthy investors would most likely just do their own research regarding establishing and funding an emergency cash fund, so the ideal amount would most likely be determined by that individual.

The most commonly identified amount that investors feel should be available in an emergency cash fund is six months or more of expenses. This is identified by 35 percent of wealthy investors. Nearly a quarter of investors feel that an emergency cash fund should have six months or more of income. Fifteen percent feel that somewhere between one to six months of expenditures is the right amount to have in an emergency cash fund. Ten percent of investors just pick a specific amount of money or some amount between one to six months of income.

Investors that have not established an emergency cash fund may feel that they can account for any unneeded expenses through savings or investment accounts. These investors may find however that they feel even more financially secure if they were to have an emergency cash fund.