Emergency Fund Calculator
An emergency fund is measured in months of expenses, not in a round number of dollars. Enter what you actually need to spend each month — essentials only, not your full budget — and how much cover you want.
Your inputs
Your result
Formula
How much cover you actually need
Three months is the usual floor, six the common recommendation. The right answer depends on how quickly you could replace your income. A salaried worker in a field with steady demand and a partner also earning can reasonably sit at the lower end. A freelancer, a sole earner, or anyone in a sector with long hiring cycles should hold more.
Use essential expenses rather than your normal spending. In a genuine emergency, discretionary spending stops, and budgeting the fund against your full lifestyle makes the target larger and more discouraging than it needs to be.
Where to keep it
Somewhere safe and reachable within a day or two — a high-yield savings account is the standard answer. Not invested in anything that can fall, because emergencies correlate with bad markets: job losses cluster in downturns, which is exactly when you would be selling at a loss.
Fund it before you optimise anything else
Without a buffer, an unexpected repair goes onto a credit card at a high rate, and the interest on that usually exceeds whatever you gained by investing instead. The emergency fund is not an investment; it is what stops one bad month from undoing a year of progress.
Partial credit counts
The months-covered figure matters more than the percentage. Getting from zero to one month of cover removes more risk than getting from five months to six.
Frequently asked questions
Should I build an emergency fund before paying off debt?
Usually a small one first — often one month of expenses — then attack high-rate debt, then finish the fund. Without any buffer, the next surprise goes back on the card.
Does a credit card count as an emergency fund?
No. It converts an emergency into expensive debt, and credit limits can be reduced precisely when conditions worsen.
Should the fund grow with my income?
It should grow with your expenses, which is not the same thing. If your spending rose with a pay rise, the target rose too.