Size an emergency fund from essential monthly costs and the months of cover you want.
The fund is sized on essential spending rather than total spending, because discretionary costs stop in an emergency. Three months is the usual floor and six is the common target, with more for variable or single-income households. An emergency fund is what stops a temporary shock becoming permanent debt, and it is the prerequisite for taking any investment risk elsewhere.
Emergency Fund
Target = essential monthly expenses × months of cover wanted
Target = essential monthly expenses × months of cover wanted The fund is sized on essential spending rather than total spending, because discretionary costs stop in an emergency. Three months is the usual floor and six is the common target, with more for variable or single-income households.
An emergency fund is what stops a temporary shock becoming permanent debt, and it is the prerequisite for taking any investment risk elsewhere.
This calculator takes 4 inputs: Essential monthly expenses, Months of cover wanted, Emergency savings held, Monthly amount you can save. The pre-filled defaults are a realistic starting point — replace them with figures from your own environment for a result you can act on.