Q I am a public employee with union protection. Before I can lose my job, almost half my office would have to be laid off. I also have contractual cost-of-living and merit increases. I've been hearing lately that a person should have eight months of living expenses in an emergency fund and not touch it. That seems like a lot of money to leave in a regular savings account given my secure employment. My question is, given these circumstances, do I really need the "emergency fund" that other people need?

ROBIN

A There's nothing magical about eight months. It isn't wrong to save a few months less -- or a few months more -- than that target after thinking through your circumstances. A financial rule of thumb is simply a starting point for judging what's smart for you to do. For instance, another money rule of thumb is that the fixed-income portion of your portfolio should equal your age. Again, it's just a mental marker for helping you decide how to allocate your investment assets between stocks and bonds. (That's a rule of thumb I like, by the way.)

The size of the suggested emergency savings pot has evolved in recent years. For a long time, the standard advice was to set aside three to six months of easily accessible money in a savings account, short-term certificates of deposit, money market mutual funds, and the like. That number has risen to six months to a year. The risk of a long spell of unemployment has gone up. The odds have increased that when an unemployed worker does land another job, it will pay less than the old job, too. Of course, for many people, saving enough to meet living expenses for three months to a year is really a goal, not a current reality.

My crystal ball is no better than anyone else's, but it's a reasonable bet that the recession will get much worse -- and last a long time. I hope I'm wrong, but I'd plan for a bad downturn. There's no penalty for financial prudence. What's more, say you do build up a bigger-than-necessary emergency fund; relabel it your "opportunity fund." The lesson of past recessions -- this'll be no different -- is that anyone with savings, a stable job and no debt (except a 30-year, fixed-rate mortgage) will have ample opportunities to snap up bargains. Prudence pays off big when it comes to finding bargains in a downturn.

Chris Farrell is economics editor for American Public Media's "Marketplace Money." Send questions to cfarrell@mpr.org, or to kaching@startribune.com. Put "Your Money" in the subject line.