How Big Should My Emergency Fund Be?

The rule of thumb everyone quotes is measuring the wrong thing

"Three to six months" is good advice attached to the wrong number. Three to six months of what?

Most people reach for salary, because it's the figure they know. But an emergency fund doesn't replace your income — it replaces your outgoings while the income has stopped. Those are different numbers, and the gap between them is where the mistake lives.

Two people earning $60,000 each: one with a mortgage, a car payment and two kids, one renting a room and cycling to work. Same salary, same "six months" advice, targets that differ by more than double. The salary told you nothing.

Work it from what a month costs

Essentials means the bills that keep arriving after the income stops:

• Rent or mortgage
• Utilities, food, insurance
• Transport — to work, and to interviews
• Minimum payments on every debt. Miss these and the emergency compounds into a second emergency.

Not essentials: streaming, subscriptions, the gym, eating out, the holiday fund. Not because they don't matter, but because in the month you lose your job they're the first things to go. Including them inflates the target into a number you never reach and quietly give up on.

The arithmetic

Housing $1,400, everything else $1,100.

One month of essentials:

$1,400 + $1,100 = $2,500

Six months of cover:

$2,500 × 6 = $15,000

With $2,000 already set aside:

$15,000 − $2,000 = $13,000 to go

At $300 a month:

$13,000 ÷ $300 = 43.3, rounded up to 44 months

Yes, 44 months is a long time

Three years and eight months, on those numbers. That figure is honest and it's the reason a lot of people never start.

They should start anyway, and here's the argument.

The distance from zero to one month of cover is worth far more than the distance from five months to six. The first stretch takes you from "any surprise becomes debt" to "most surprises are just annoying." The last stretch is refinement. The calculator tracks your percentage for exactly that reason — at $2,000 you're already 13% of the way there, and that 13% is doing real work.

If 44 months is genuinely too slow for your situation, the tool also shows what closing the gap inside a year would cost — $1,083.33 a month here. That's usually not affordable, and seeing it is still useful: it tells you whether the constraint is your saving rate or your timeline.

Three months, six, or twelve?

The honest question isn't what the internet recommends. It's how long it would take you to replace your income.

Your situation	Months of cover
Salaried, stable field, second income in the household	3
Most people	6
Self-employed, commission, sole earner, seasonal field	9–12

Someone in a field where the hiring cycle runs in seasons needs a bigger fund than someone who could take a similar job next month — regardless of what either of them earns.

Why there's no interest in this calculation

You'll notice the tool never asks for a rate. That's deliberate.

An emergency fund has to be reachable in about a day, and instant-access accounts pay little enough that over the couple of years it takes to build one, interest moves the timeline by a rounding error. Including it would make the number look friendlier than it is — and this is the one savings target where you'd rather be pessimistic.

Chasing yield is also how emergency funds end up somewhere they can't be reached in an emergency. Not a fixed term. Not invested. Not in a stocks account that might be down 20% on exactly the week you need it.

If you want interest properly modelled for a goal where it does matter, the savings goal calculator does that.

Where it should actually sit

A separate instant-access savings account, ideally at a different bank from your current account. Reachable in a day when you need it, just far enough away not to raid on a Friday night. Not the account your card is attached to.

Milestones worth marking

Don't track this as one number you're 13% of the way through. Track it as a sequence, because each step removes a real category of problem:

1. The first $1,000 — covers most single emergencies outright
2. One month of essentials
3. Three months
4. Six months

Re-run the numbers after anything that changes what a month costs — a move, a new baby, a new debt, a rent increase. The target isn't a fixed figure; it's a multiple of a number that drifts.

Print the emergency fund worksheet and total up what a month really costs you. That line is the one everything else is built on, and almost nobody knows it from memory.

Not financial advice — general information to help you plan.