hard · Certified Financial Planner General Principles
The Ostrow household needs to size their emergency fund. Mr. Ostrow is a freelance graphic designer with irregular income, and Mrs. Ostrow is a tenured professor. They have high fixed monthly expenses and poor health insurance.
According to the 2026 guidelines, what is the most appropriate recommendation?
- Twelve months of gross income to ensure total protection against a multi-year recession.
- A three-month reserve since Mrs. Ostrow has high job security as a tenured professor.
- A six-month reserve of non-discretionary expenses due to the high income variability and health risk.
- Three months of total expenses including discretionary items like vacations and dining out. In this case
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