<prompt> Human: Hello,I was recently laid-off, and am seeking advice on few key points regarding our financial situation. We are a family of 3, with a fourth member on its way. We will now be on single income atleast for couple of months until after the baby arrives, maybe even a year. Here is our financial situation:1. We will certainly dip into our savings every month with x .2. Wife will be unable to work for atleast 6 months to a year, and her severance package does not cover the costs as a result the dip from savings.3. Fortunately have a pool of money to dip into but need advice on allocating diversifying the pool wisely given the current and future financial situation, in order to cover the losses to some extent.4. Baby expenses and medical expenses need to be factored in as there is a fourth member of family on its way.5. We have mortgage debts and 401K as investments currently. So, given this scenario, would really appreciate your advice and pointers.1. What should be the of cash reserve emergency funds for this situation? Typically, it is 4-6 months of post-tax but given this situation is unique medical costs single income, should I go more conservative and what should that number be ?2. As we are surely going to dip into savings, do I create a separate pool for this money apart from the cash reserve in Pt. 1.3. Where can I park the cash reserve for a decent return, given there is not much room for risk here but want to still channelize it to mitigate the loss to some extent. 4. Do you recommend parking money in index funds or other investment options given it is still liquid ? 5. After points 1-4 are covered soundly, I wish to move forward than just getting by this coming year with some form of sound investments. What are my best bets - money market accounts, CDs, municipal bonds, index funds, stocks, IRA, tax related savings instruments, relatively safer investments instruments or any other?I sincerely appreciate your advice. Thank you.  <response>: Not mentioning income which is the most important part of the equation to give you an honest answer. But you may not like it. 