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Emergency Fund Calculator
An emergency fund covers your essential bills if you lose income or face a big unexpected cost. Work out your target and how long it will take to build.
How to size your emergency fund
Count only essential costs, the bills you would still pay if you lost your job tomorrow: housing, utilities, food, transport, insurance and minimum debt payments. Leave out dining out, holidays and subscriptions you would cancel. Multiply by the number of months you want covered.
Example
Essentials of $1,500 rent, $250 utilities, $500 groceries, $300 transport, $250 insurance and $200 minimum debt payments total $3,000 a month. Six months of cover is $18,000. With $3,000 saved and $500 a month going in, it takes 30 months to reach the target, a little less if the account pays interest.
How many months is right for you?
| Situation | Suggested cover |
|---|---|
| Two stable incomes, no dependents | 3 months |
| One stable income or dependents | 6 months |
| Self-employed, commission or seasonal income | 9–12 months |
| Near retirement or with health concerns | 12 months |
Keep the money in a high-yield savings account; at 4% APY an $18,000 fund earns about $720 a year while it waits. Set a savings goal to get there by a specific date.
Frequently asked questions
How big should an emergency fund be?
Most advisers suggest 3 to 6 months of essential expenses. Aim for 6 or more if your income is irregular, you are the only earner, you work in a volatile industry, or you have dependents.
Where should I keep my emergency fund?
Somewhere safe and instantly available: a high-yield savings account or money market account at an insured bank or credit union. Not in stocks, which can drop just when you need the money.
Should I save an emergency fund or pay off debt first?
Many people start with a small starter fund of $1,000 to $2,000, then attack high-interest debt, then build the full fund. Without any cushion, one surprise bill goes straight back on the credit card.