We’ve made it through paying off all of our debt (except for our home), now it’s time to move to Baby Step Three and fully fund our emergency fund.

There’s really not much to this step except to pile up cash into our money market account (MMA) where we kept our baby emergency fund from Baby Step One. Before moving to Baby Step Four, we need to get enough cash to cover three to six months worth of expenses not income.

If you’re on your own or just you and a spouse, you’d probably just fine to stop at three months worth. If you have a house full of kids, well then six months would make more sense.