Emergency Fund Worksheet
Work out what a month really costs you, set the target, and track it to full.
BFCBrilliance · bfcbrilliance.com/tools/emergency-fund-calculator
What a month costs when the income stops
| Essential | Amount |
|---|---|
The target
- One month of essentials
- Months of cover
- TARGET
- Already set aside
- Gap
- Saving per month
- Months to go
- Account it lives in
The arithmetic
- Target
- one month of essentials x months of cover
- Gap
- target - already set aside
- Months to go
- gap / monthly saving, rounded up
- Within a year
- gap / 12
- Steady salary
- 3 months of cover
- Common default
- 6 months of cover
- Self-employed or sole earner
- 9 to 12 months
- Interest
- not included - instant access pays too little to matter
What counts as an essential
- Rent or mortgage
- Utilities - power, water, heating
- Food and household basics
- Insurance - health, home, car
- Transport to work and interviews
- MINIMUM payments on every debt
- Childcare you could not drop
- Phone and internet - a job search needs both
- Prescriptions and ongoing medical costs
Milestones, in order
- The first $1,000 - covers most single emergencies
- One month of essentials
- Three months
- Six months - the common target
- Account moved somewhere you will not raid it
- Standing order set for the day after payday
- Target re-checked after any move, new baby, or new debt
Start before you can do it properly
The full target is a multi-year project for most people, and the number can be discouraging enough to stop someone starting at all. It should not be. The first thousand dollars removes the most common financial emergency there is, and the difference between zero and one month of cover is far bigger than the difference between five months and six.