With the way the economy has been going as of late, how much of a reserve do you try to keep on hand for emergencies? The usual rule of thumb was 3 - 6 months. I have usually tried for the six month amount - usually invested in CD's to keep the interest flowing in.

Jeez, I never thought of it. I have some $ in a savings account, but never aimed for a specific amount or time-frame. I guess the thought never crossed my mind that I'd be out of work (I've been stuck in the same place for the last 19 years). Is there a thread here that explains more about CDs? I really wouldn't even know how to go about getting one and always kept my $$ in savings accounts so as to have quick access to the funds if need be.

At the moment the bank accounts are pretty low (been buying lots of stuff for my online resale biz) but usually keep a few thousand in the bank, and then I have about 20k worth of Procter and Gamble stock from when I worked there that's able to be cashed (with no fees) and in my hands within a week or so if I had to.

I currently have a big chunk of my savings in CDs, all of which are > 5%. One's maturing in April, while the rest are maturing in June, July, September and March of 2009.

I'm too poor to have any $ left over.

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Ok, I have about 1 month's bring home pay saved up.

I usually have any reserves sitting in my Vanguard Prime MMF account. It's basically cash-equivalent (they even offer checkwriting privileges), and I can ACH the money to my regular banking account in 1-2 days. Also, don't forget if you have Roth IRAs you can withdraw the principal at any time without tax penalty, so that can act as a (in emergency only!) cash reserve.

that MMF account pays you interest? how does one go about getting one?

We have about a year's worth in a Money Market...try to keep about $500 or so in checking...have about 2K in a savings account...other cash isn't quite as accessible, but we could get it if we needed it...also have several life insurance policies we could borrow against...

First you should read about Money Market Funds (MMFs). They provide liquid cash-like reserves, while paying a specific yield in interest, generally paid monthly.

I personally use the one from Vanguard, but there are money market funds offered by most of the major banks. Note that they are not FDIC insured, but the chances of them dipping below the $1/share constant value are extremely low.

As Blue says, you definitely want one that gives you checkwriting capability (I believe Vanguard has a $250 minimum on a check) as well as the ability wire money around. The Vanguard MM is currently yield 4.41% for the past 30 days. I would expect it to dip further, but it is much better than most other accounts.