Emergency Fund Calculator
“3-6 months” is a starting point, not a plan. Get a personalized target based on your income stability, insurance, and life situation.
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Emergency Fund Calculator
Personalized target based on your risk profile
Rent/mortgage, utilities, food, insurance, minimum debt payments
Your Target Emergency Fund
$14,000
4 months of expenses
Gap: $9,000
3 months
$3,000/mo
6 months
$1,500/mo
12 months
$750/mo
Emergency Fund Ranges
Minimum
$10,500
3 months
Comfortable
$21,000
6 months
Your Target
$14,000
4 months
Why an Emergency Fund Matters
Avoid Forced Selling
Without cash reserves, a $5,000 emergency means selling investments — possibly at the worst time in a downturn.
Break the Debt Cycle
56% of Americans can't cover a $1,000 emergency. Without savings, unexpected costs go on credit cards at 20%+ interest.
Enable Risk-Taking
A funded emergency fund gives you the courage to negotiate harder, switch jobs, start a business, or pursue FIRE without fear.
THE DATA
The median job search takes 5 months in 2026. A major car repair averages $1,000-$3,000. An ER visit without insurance: $2,500+. Your emergency fund is the difference between a setback and a crisis.
Where to Keep Your Emergency Fund
✓ High-Yield Savings Account
Best option. FDIC insured, accessible in 1-2 days, earning 4.5-5%+ APY in 2026. Keep it separate from checking to avoid temptation.
Examples: Marcus, Ally, Discover, Capital One 360
~ Money Market Account
Good alternative. Similar rates to HYSA, sometimes with check-writing ability. May have minimum balance requirements.
Slightly less liquid but comparable returns
✗ Stocks / Index Funds
Bad for emergency funds. Markets can drop 30%+ right when you need the money. The purpose of this money is security, not growth.
Exception: amounts above your target can be invested
✗ CDs / Bonds / Crypto
CDs lock your money with early withdrawal penalties. Bonds can lose value. Crypto is far too volatile for emergency reserves.
Liquidity matters more than yield for emergency funds
How to Build Your Emergency Fund
Start with $1,000
This covers most single emergencies and breaks the paycheck-to-paycheck cycle. Prioritize this before extra debt payments.
Automate transfers
Set up automatic transfers on payday. Even $50/week = $2,600/year. What gets automated gets done.
Build to 3 months while paying debt
Alternate between emergency fund and high-interest debt (20%+). Don't ignore either completely.
Use windfalls strategically
Tax refunds, bonuses, cash-back rewards, and side hustle income can accelerate your fund dramatically.
Reach your full target, then invest
Once fully funded, redirect those automatic transfers to your investment accounts for FIRE.
Frequently Asked Questions
How many months of expenses should my emergency fund cover?
The standard advice is 3-6 months, but the right number depends on your situation. Government employees with job security may be fine with 3 months. Freelancers, single-income households, or those with dependents should target 6-12 months. Our calculator gives a personalized recommendation based on your specific risk factors.
What counts as an "essential expense" for emergency fund calculations?
Include only expenses you can't avoid: rent/mortgage, utilities, groceries, insurance premiums, minimum debt payments, childcare, and transportation to work. Don't include discretionary spending like dining out, subscriptions, or entertainment—you'd cut those in a true emergency.
Where should I keep my emergency fund?
A high-yield savings account (HYSA) is ideal. In 2026, top HYSAs offer 4.5-5%+ APY. Your emergency fund should be: (1) liquid — accessible within 1-2 days, (2) safe — FDIC insured, not invested in stocks, (3) separate — in its own account so you're not tempted to spend it. Don't put it in CDs, bonds, or the stock market.
Should I build my emergency fund before paying off debt?
Yes, at least partially. The standard approach: (1) Build a $1,000 starter emergency fund first, (2) Pay off high-interest debt (credit cards), (3) Build to 3 months of expenses, (4) Pay off remaining debt, (5) Build to your full target. Without any emergency fund, unexpected expenses go on credit cards and create more debt.
Should I invest my emergency fund for higher returns?
No. The purpose of an emergency fund is safety and access, not growth. Investing it in stocks means you might need it during a market downturn—exactly when your investments are worth less. The "lost returns" from keeping cash are the price you pay for financial security. Think of it as insurance, not an investment.
How does an emergency fund fit into a FIRE plan?
An emergency fund is the foundation of any FIRE strategy. Without one, a job loss or medical emergency forces you to sell investments at potentially bad times (sequence of returns risk). Most FIRE practitioners keep 6-12 months in cash before aggressively investing. Once you reach FIRE, your emergency fund effectively becomes your spending buffer.
Do I need an emergency fund if I have a large investment portfolio?
Yes, but the size can be smaller. Even with $500k+ invested, a 3-month cash buffer prevents forced selling during market downturns. The real risk isn't the total amount—it's being forced to sell at the worst time. A cash emergency fund is your buffer against sequence-of-returns risk.
How do I build an emergency fund on a tight budget?
Start small: even $25-50/week adds up. Automate transfers on payday so it happens before you can spend. Use found money (tax refunds, bonuses, cash back) to boost it. Sell unused items. Pick up a side gig temporarily. The psychological benefit of having even $1,000 saved is enormous—it breaks the paycheck-to-paycheck cycle.
Ready to Build Your Safety Net?
An emergency fund is step one. Once it's funded, accelerate your path to financial independence.
Not financial advice. This calculator is for educational purposes only and does not constitute financial, tax, or investment advice. Results are estimates based on the inputs you provide and historical data. Consult a qualified financial advisor for personalized guidance. Read our editorial guidelines.