In last month’s post, we reviewed the book, “Hot (broke) Messes,” by Nancy Trejos. We received several questions related to that review. We will try to answer them in the next couple months.
Q: How much money should I save in an emergency fund?
A: Most people should save about 6 months of their fixed expenses in an emergency fund. Fixed expenses are those that you MUST incur each month, such as rent or a mortgage payment. The reason for the 6 month figure is that most dentists will have disability insurance. If something happens and you cannot work, there may be up to a 6 month waiting period associated with disability insurance payments. While you wait, you will need money to live on. The emergency fund should be in the form of a savings account, money market account or something similar because these accounts are easy to liquidate if you need money right away.
Q: Can you borrow money for living expenses too, not just tuition and school supplies, etc.?
A: Yes, in general. Many student loans will help cover the costs of school and the cost of attendance/living. However, students will likely have to apply for both government aid and private loans to cover the cost of living expenses in addition to tuition, and government aid may be dependent on financial need.
~Megan Hille, Esq., Pesavento & Pesavento
About Megan Mathers
Megan is an accountant and tax attorney with Mathers Law, a firm focused on providing accounting, tax, business advisory and legal services to the dental and medical communities. Megan earned her Bachelor's Degree in Accounting from Marquette University and her law degree from Loyola University Chicago School of Law. Megan's practice focuses on tax compliance, tax planning and wealth and estate planning.