The back up plans you are refereeing to literally means emergency funds. Although i wouldn't prefer stacking emergency funds before thinking of starting an investment. To me it is better to do both simultaneously so as not to miss out on good opportunities to jump in the market. Imagine seeing Bitcoin so cheap that you can afford if you lump sum this week, do you rather prefer to keep your money fund this year and then use the next year money to buy when by then the price would have gone back up?
@Jayjuangee and everyone which do you prefer should be priority?
1. Building your emergency fund first before investing
2. Start investing immediately and leave emergency fund for later
3. Do both of them simultaneously
Going straight to answering your question, it will depends on your source of income and how it covers up your cost of living. For example, earning a momthly of $200 while your total cost of living amounts to $150 and $50 is left. The left over is not meant to be invested fully, can be divided by two or a $30 : $20 ratio. First part kept for emergency funds as the other used to DCA. This implies given your number 3 option the correctness, both can be done simultaneously.
If you then decide stacking up the reserve income after all cal. on the cost of living for the month, it looks a little inappropriate considering each point missed can aswell be more profitable than your earlier intentions. Most at times we don't even have to touch our emergency funds due to not facing any challenge at that moment, it is still necessary to keep on stacking the reserve income and still carrying out the DCAing simultaneously.