How Big Should Your Emergency Fund Be?
Work out your emergency fund target from essential expenses, choose between 3, 6 or 12 months, and see how long it takes to save, with a free calculator.
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Free tool: Emergency Fund CalculatorAn emergency fund is cash set aside for the things you can't plan for: a job loss, a medical bill or a broken-down car. It keeps a bad month from turning into credit card debt. This guide shows how to size yours and how long it takes to build, using the free Emergency Fund Calculator.
Base it on essential expenses
Your target is a number of months of essential spending, the bills you'd still have to pay if your income stopped, not your whole budget.
Example:
| Essential expense | Monthly |
|---|---|
| Rent or mortgage | $1,500 |
| Utilities & phone | $250 |
| Groceries | $500 |
| Transportation | $300 |
| Insurance & healthcare | $300 |
| Minimum debt payments | $150 |
| Other essentials | $100 |
| Total | $3,100 |
3, 6 or 12 months?
- 3 months ($9,300 here): a reasonable minimum with a stable job, two incomes or other safety nets.
- 6 months ($18,600): the most common target, and a good default for most households.
- 12 months ($37,200): worth considering if you're self-employed, have one income supporting a family, work in a volatile industry or have health issues.
How long it takes to save
Starting with $5,000 saved (enough for 1.6 months) and adding $500 a month to an account earning 4%:
- 3 months covered in about 9 months
- 6 months covered in about 2 years 2 months
- 12 months covered in about 4 years 9 months
Doubling the savings to $1,000 a month reaches the 6-month target in about 1 year 2 months. The interest helps a little too: at 0% the same target takes 28 months instead of 26.
Where to keep it
An emergency fund should be safe and easy to reach: a high-yield savings account or money market account, separate from your everyday checking so you're not tempted to spend it. Investing it in stocks risks it being down exactly when you need it.
Building it alongside other goals
- Start with a small buffer, such as one month of expenses, before paying extra on low-rate debt.
- Automate a monthly transfer on payday.
- Put windfalls, such as tax refunds or bonuses, toward the fund.
- Refill it after you use it.
For other savings targets, see How Much to Save Each Month for a Goal.
How to use the Emergency Fund Calculator
- Open the Emergency Fund Calculator.
- Enter your monthly essentials: rent or mortgage, utilities, groceries, transportation, insurance, minimum debt payments and other essentials.
- Choose how many months to cover: 3, 6, 9 or 12.
- Enter what you've already saved, how much you'll save each month and your savings account's APY.
- Read the results: your target, what you've saved, what's still needed and how long it will take, with a chart of your path to the target, a breakdown of your essentials and a table of milestones.
Frequently asked questions
How much should I have in my emergency fund?
Usually 3 to 6 months of essential expenses. With $3,100 of essentials, that's $9,300 to $18,600.
Should I save an emergency fund or pay off debt first?
Many people build a small starter fund first, then pay down high-interest debt, then finish the full fund. That way an emergency doesn't push you back into debt.
Where should I keep my emergency fund?
In a safe, easy-to-reach account such as a high-yield savings account, not in investments that can fall in value.