Lesson 1 of 3 · 5 min read
Why 3 to 6 months of expenses, not a fixed sum
“You need an emergency fund” is generic advice. See how to work out your real target, tailored to your own expenses, not to a figure picked at random.
An emergency fund is a sum of money set aside, separate from the rest of your savings, only for unexpected and essential situations: losing your job, an urgent car repair, a medical problem that isn't fully covered.
The standard yardstick, 3 to 6 months of essential expenses, isn't a magic rule but a reasonable compromise between safety and efficiency. ESSENTIAL expenses (not total income) are the right yardstick: rent or mortgage, utilities, basic food, transport to work, compulsory insurance.
How to choose 3 or 6 months
- Stable income, two incomes in a couple, a job in high demand → closer to 3 months.
- Variable income (freelancing, commission, self-employed), sole breadwinner, an unstable sector → closer to 6 months, sometimes even more.
Use the Emergency fund calculator in the Calculators section: you enter your essential monthly expenses and directly get the target sum for 3 and for 6 months.
In short
- The yardstick is essential monthly expenses, not total income.
- 3 months for stable income, 6+ for variable income or a sole breadwinner.
- It isn't a rigid rule: it is a starting point you can tailor.