Find out how big your emergency fund should be based on your essential monthly expenses and how secure your income is, and how long it will take to build.
How much should be in an emergency fund?
The usual guideline is three to six months of essential expenses. Choose the higher end, or more, if your income is irregular, you are self-employed, you are the only earner, or your job would be hard to replace.
| Your situation | Suggested cushion |
|---|---|
| Two stable incomes, no dependents | 3 months |
| One stable income | 4 to 6 months |
| Self-employed, commission or seasonal income | 6 to 12 months |
Essential expenses only
Count the costs you could not cut in an emergency: rent or mortgage, utilities, groceries, insurance, transportation, childcare and minimum debt payments. Leave out dining out, travel and subscriptions you would pause.
Worked example
Essential costs are $3,200 a month, so a six-month fund is $19,200. With $4,000 already saved, you need $15,200 more. Saving $400 a month, that takes 38 months, a little over three years.
Building it step by step
- Start with a starter fund of $1,000 or one month of expenses.
- Automate a transfer on payday into a separate high-yield savings account.
- Add windfalls such as tax refunds and bonuses.
- Refill it after you use it, before resuming other goals.
Frequently asked questions
Where should I keep my emergency fund?
Somewhere safe and easy to reach, such as an FDIC- or NCUA-insured high-yield savings account. Avoid investing it in stocks.
Emergency fund or debt first?
A common approach is a starter fund first, then high-interest debt, then the full fund.
Related tools
Results are estimates for planning and education only. They are not financial, tax, legal or medical advice. Check important numbers with a qualified professional.