Suze Orman says there is ‘no substitute’ for making this simple money move — and it’s now more lucrative than it has been in over a decade

For financial guru and best-selling author Suze Orman, savings is not only essential, it can help you “sleep better” and “live a better life.” (And thankfully, some savings accounts are paying more these days than they have in a decade — see the best savings account rates you can get here.)

“You know I am all for investing money you won’t need for decades in low-cost stock index mutual funds or exchange-traded funds. Over the long-term, stocks tend to produce higher returns than bonds or cash. But I’m also a huge fan of safe savings. There is no substitute for the security of knowing you have money in the bank that will not lose value in a bear market,” Orman writes.

“That can be your emergency fund, or money you plan to use in the next few years for a home down payment. Or just because you will sleep better, live a better life, knowing you have money in the bank,” Orman continued in 2018.

What’s more, Orman now recommends 12 months of savings, up from her previous eight. “You know my hope is that you work your way toward having enough set aside to cover 12 months of essential living costs. And you also know that I realize that can take time,” Orman wrote this year.

See the best savings account rates you can get here.

How much should you have saved in an emergency fund?

Most pros agree with Orman — savings is critical and you need an emergency fund – but just how much they say to have varies.  For his part, Greg McBride, chief financial analyst at Bankrate, says emergency savings should be a companion throughout your adult life as unplanned expenses or income disruptions can happen at any time.

“Beefing up emergency savings is especially appropriate in a bear market as it is often a prelude to, or coincides with a recession where the risk of job loss increases,” says McBride. Indeed, for most people, enough savings to cover six months’ worth of expenses is the appropriate cushion, but for sole breadwinners or anyone self-employed, a larger nine to 12 month cushion is recommended, says McBride.

Certified financial planner Elizabeth Buffardi at Crescendo Financial Partners recommends building out two emergency funds. “In the primary fund, you should always have at least 10% of your annual income. If you’re self-employed or working multiple jobs, you may want to have more. This primary emergency fund is for the unexpected, like your car breaks down or there’s a bad storm and you have to pay for home repairs. In your secondary emergency fund, you want to have double whatever is in your primary fund. This is for a triple whammy of bad events where three bad things happen within six months,” says Buffardi. 

See the best savings account rates you can get here.

Ultimately, certified financial planner Mark Struthers of Sona Wealth Advisors says consumers should think of comfort cash not just as a backup for job loss or other emergencies, but also because it provides peace of mind. “It allows you to sleep at night and even take on more risk in long-term assets. You can ignore your 401(k) a lot easier if you know you have 3 to 6 months of living expenses,” says Struthers.

Of course, you don’t want too much in savings: “The risk is losing your purchasing power and if you’re not at least earning at a rate of inflation, you’re losing the ability to purchase things as they increase in price,” says certified financial planner Jarrod Sandra of Chisholm Wealth Management.

So beyond your emergency fund, the right move is absolutely investing, pros say. Sandra says investing is for the long haul. “I usually tell my clients they need to think of money in investments with a five-year time horizon at minimum. If you need it within five years, we need to look at different options.