Mojo...No Go?

Hi Scott,

I have a query about building up an emergency fund of 3 months salary (Mojo). My partner and I earn roughly the same income. Do you recommend we both have the equivalent of 3 months salary in Mojo ($40k combined) or do you think it is ok to just have one 3 month salary amount ($20k) in Mojo to cover for either of us if needed.

Kath

Hi Kath,

It's not 'three months of salary', but 'three months of living expenses'.The idea behind having a Mojo account is that you only draw on it in an absolute emergency. Seeing a thermomix on sale is not emergency. Having your house burn to the ground with everything in it is an emergency. When you're forced to use your Mojo money, you spend it carefully, making every cent stretch until you're back to normal.

Now, if you and your partner are getting married, do the following: work out how much you could both live on for three months, then open an online savings account in joint names (nickname it Mojo), and start saving till you get to your joint goal.

If you're not planning on getting married, or sharing your finances, you'll need to save three months of living expenses on your own. Remember, a Mojo moment that could crop up is breaking up with your boyfriend.

Scott