How to calculate your emergency fund
The formula is simple: emergency fund target = monthly essential expenses ร months of cover. If your essentials come to 3,200 a month and you want six months of cover, your target is 19,200.
The hard part is getting the first number right. Use what you actually pay, not what you think you pay: your last three months of bank statements are the most honest source. Our list of monthly expenses is a useful checklist so nothing gets missed, and the free expense tracker shows your real totals by category if you are not sure.
What counts as an essential expense?
Essentials are the costs that keep going even when your income does not: rent or mortgage, utilities, phone and internet, a basic grocery shop, transport to get to work or interviews, insurance premiums, medication, childcare, and the minimum payments on your debts.
Leave out anything you would cut in the first week of a crisis: eating out, holidays, shopping, and most subscriptions. That is why your emergency fund target is usually well below three or six months of your normal spending. If your fixed costs alone are close to your income, our guide to fixed vs variable expenses explains where the biggest savings usually are.
How many months of expenses do you need?
Three months suits people with a stable job, a second income in the household, and few dependents. It covers most short gaps and large repairs.
Six months is the most common recommendation and suits single-income households, people with dependents, or anyone in a field where finding a new job can take a while.
Nine to twelve months suits freelancers, contractors, commission earners, and the self-employed, because income can stop with no notice period and no severance. It also makes sense when several risks stack up at once, such as being the only earner with an older home that could need repairs.
The calculator turns these rules into a suggestion based on what you tick, and you can override it with one tap. For the reasoning behind the ranges, read our guide on how much you should have in savings.
How long will it take to build?
Divide what is left to save by what you can put aside each month. With a 19,200 target, 2,000 already saved, and 600 a month going in, you would reach one month of cover in 2 months, three months of cover in 13 months, and be fully funded in 29 months.
That can feel slow, so work in milestones rather than staring at the final number. A first month of essentials already turns most car repairs and surprise bills into an inconvenience rather than a crisis. If you need to find more to save, the 50/30/20 budget calculator shows a sensible split of your take-home pay, and tracking your spending for a month usually turns up a category you can trim.
Where to keep your emergency fund
Keep it safe, separate, and quick to reach. A high-yield or high-interest savings account is the usual choice: the money earns some interest, it is protected from market falls, and you can move it to your everyday account within a day or two.
Avoid investing it in shares, because markets can fall at exactly the moment you lose your job. Avoid locking it in a fixed-term deposit with withdrawal penalties. And keep it out of your everyday account, where it quietly blends in with spending money. For other goals such as a deposit or a trip, use the savings goal calculator so each pot has its own target.
These free tools provide general estimates for educational purposes only and are not financial, tax, or investment advice. For decisions specific to your situation, consult a qualified professional.