Safe Money

How much money do you think you should set aside? Have you really ever considered the amount of cash you should have readily available for a “rainy day”? I’m not money that you’re keeping for retirement. I’m not referring to money that’s accumulating for some other purpose, such as education, a home, a down payment on a car. There’s other emergencies. What should you have set aside for when the refrigerator breaks? When the septic tank backs up? What would it cost to be unemployed for a few months should your office burn down or get destroyed by a toronado? I’ve seen some people suggest six times your monthly expenses. I’ve heard others recommend at least a year. I’ve also been told to look for at least half of my yearly income. If I had half of my yearly income sitting in an account somewhere, I’d probably own my own home instead. Considering at this point, I have none, I’m setting my first goal to be 1 month’s expenses. Is a money market fund or a high yield savings (like ING, CapitalOne, Emigrant, etc) the best place to start this savings? Should I go with my credit union instead?