How Big Should Your Emergency Fund Be?
The classic answer is 3–6 months of expenses — but the right number depends on your job, your dependents and your fixed costs. Here's how to size it.
Try the emergency fund calculatorPut these numbers to workOpen →An emergency fund is cash set aside for the unexpected — a job loss, a medical bill, a car repair — so a bad month doesn't become debt. The common rule is three to six months of essential expenses, but that range is a starting point, not a one-size answer.
Base it on expenses, not income
Size the fund against what you must spend each month, not what you earn. Add up the essentials: housing, utilities, food, insurance, minimum debt payments and transport. Discretionary spending — dining out, subscriptions — can be paused in a real emergency, so leave it out of the core number.
What pushes the number up
- •Irregular or commission-based income — aim for the higher end.
- •A single income supporting dependents.
- •A specialised job where finding a new role takes longer.
- •High fixed costs you can't quickly cut.
What lets you keep it smaller
- •Two stable incomes in the household.
- •Few dependents and low fixed costs.
- •Strong, genuinely accessible backup options.
Where to keep it
The fund's job is safety and access, not growth. Keep it in a high-yield savings account — separate from your everyday checking so you're not tempted to spend it, but reachable within a day or two. Investments can fall exactly when you need the cash, so they're the wrong home for this money.
- 1Total your essential monthly expenses.
- 2Choose a months-of-cover target based on your job stability and dependents.
- 3Multiply to get your goal, then subtract what you've already saved.
- 4Automate a monthly transfer until you close the gap.