What an emergency fund is
It’s money set aside for things you can’t predict: a breakdown, a medical bill or losing your job. It isn’t for vacations or sales.
Emergency fund calculator
Add up your essential expenses, choose how many months to cover and see how much you need and when you’ll have it.
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How many months to choose
The usual benchmark is three to six months of essential expenses. With a stable job and two incomes, three may be enough. If you’re self-employed or live on one income, aim for six or more.
Start small
If the number looks scary, set a smaller first goal, such as one month of expenses or $500. The hard part is getting into the habit of setting something aside each month.
Frequently asked questions
Where should I keep my emergency fund?
Somewhere you can reach quickly and that won’t suddenly lose value, like a savings account separate from your everyday one. Don’t put it in the stock market.
Emergency fund first, or pay off debt?
A small cushion first, so the next surprise doesn’t put you back in debt. Then tackle expensive debt, like credit cards, and finish the fund after that.
Related articles
The 50/30/20 rule: what it is and how to use it
How the 50/30/20 budget rule works, what goes in each part, examples on $3,000 a month and what to do if the numbers don’t work where you live.
How to make a monthly budget in 6 steps
Work out what comes in, separate your fixed costs, split the rest by category and review it at the end of the month. With a worked example on $3,000 a month.
More tools
Monthly budget planner
Split your income across categories and see what’s left. Ready to print.
50/30/20 budget calculator
Work out how much of your paycheck goes to needs, wants and savings.
Recurring expenses calculator
Add up rent, bills and subscriptions to see what they cost each month and year.
Savings goal calculator
How much do you need to set aside each month to reach your goal? Find out here.
Living off your investments calculator
When could you live off your investments, and how much capital do you need?
Compound interest calculator
See how much your money grows when you invest it for years.
Start your budget today
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