# Emergency fund calculator: how big should it be?

An emergency fund should cover three to six months of your basic costs: rent, bills, food and transport, not your whole salary. Start with one month, because the first month is the one that keeps a bad week from becoming a debt. Type your basic costs and what you can set aside to see your target and how long it takes.

## What is an emergency fund for?

For costs that are urgent, necessary and unplanned: losing your job, a medical bill, a repair that cannot wait, a trip for a family emergency.

It is not for holidays, sales, or costs you know are coming once a year. Those get their own line in your budget, as explained in [why your salary runs out](/blog/why-your-salary-runs-out).

Without a fund, every surprise becomes a debt, and the debt makes the next month harder.

## How do I count my basic costs?

Count only what you could not stop paying:

- rent
- power, water, internet and phone
- food and transport
- insurance and medicine you need
- minimum payments on your debts

Leave out trips, eating out, and saving itself. In a hard month those stop first.

For someone with 1,050 of bills and 450 of food and transport, the basic costs are 1,500 a month. If that person earns 3,000, six months of costs is 9,000, not 18,000. The target is smaller than most people fear.

## Three months or six?

| Your situation | A reasonable target |
|---|---|
| Stable job, two incomes at home | 3 months |
| One income supports the household | 6 months |
| Irregular income: freelance, commission, seasonal work | 6 months or more |
| A job that would be hard to replace | 6 months or more |

The less predictable your income and the more people depend on it, the larger the fund.

## How long does it take to build?

With basic costs of 1,500 and 450 set aside each month:

| Target | Amount | Reached in |
|---|---|---|
| One month | 1,500 | 4 months |
| Three months | 4,500 | 10 months |
| Six months | 9,000 | 20 months |

Twenty months looks long. It is normal, and the fund is built only once. To get there faster:

- **Send irregular money to the fund first:** a bonus, a refund, a gift.
- **Borrow from your own wants for a while.** Move a few points from trips to the fund until the first month is in place.

How much to set aside each month is covered in [how much of your salary to save](/blog/how-much-of-your-salary-to-save).

## Where should I keep it?

In a place that is:

- **Separate** from your daily account, so it is not spent by accident.
- **Safe.** Its value should not go up and down.
- **Reachable** within a day or two.

An emergency fund is insurance, not an investment. Its job is to be there, not to grow.

## What do I do after I use it?

Refill it before you go back to your other goals. Using the fund is not a failure. It is the reason you built it.