A common emergency fund target is three to six months of essential expenses. That is a useful starting range, but your best number depends on how stable your income is, how many people rely on you, and how expensive a surprise could be.
Start with essential monthly expenses
List the bills you would still need to pay during a job loss or major disruption: housing, utilities, groceries, insurance, transportation, minimum debt payments, medications, and child care. Leave out optional spending that could be paused.
Once you have that monthly number, multiply it by the number of months you want to cover. If essentials are $3,200 per month, a three-month fund is $9,600 and a six-month fund is $19,200.
Adjust the target to your situation
- Use a larger target if your income is variable or commission-based.
- Use a larger target if you support dependents or own a home.
- Use a larger target if your insurance deductibles are high.
- Use a smaller first milestone if you are starting from zero and need momentum.
Build in stages
If the full target feels too large, break it into levels. First aim for one month of essentials. Then build toward three months. After that, decide whether six months or more makes sense for your risk level.
The Emergency Fund Calculator can turn expenses and target months into a savings goal. Pair it with the Savings Goal Calculator to see how long the fund may take at different monthly contribution amounts.
Helpful reference
Set your target
Calculate a realistic emergency fund goal.
Use your essential monthly expenses and target months to estimate the total amount to save.