Emergency Fund Calculator
Find out how many months of expenses you should keep in your emergency fund and how much you still need to save to reach that target.
Your monthly expenses
$
$500$500K
124
$
$0$1M
Emergency fund target
$18,000
$18,000 still needed
Saved0%
SavedGap
Target fund size
$18,000
Existing savings
$0
Gap to fill
$18,000
Coverage
0%
What is an emergency fund?
An emergency fund is a dedicated cash reserve set aside for unexpected events — job loss, medical emergencies, urgent repairs, or any sudden expense that disrupts your income. Unlike investments, this money must be instantly accessible and should never be locked in stocks or fixed deposits with exit penalties.
Financial planners universally recommend keeping 3 to 6 months of essential expenses in a liquid savings account. If your income is variable or you have dependants, 9 to 12 months is safer.
How to calculate your emergency fund target
- Monthly expenses — include rent/EMI, groceries, utilities, insurance premiums, and minimum debt payments. Exclude discretionary spending like dining out or subscriptions you could cut immediately.
- Months of cover — 3 months for stable salaried employees with a partner's income. 6 months for single-income households. 9–12 months for freelancers or business owners.
- Existing savings — liquid funds already set aside (savings account, liquid mutual fund). This reduces the gap you need to fill.
The formula
Target = Monthly expenses × Months of cover
Gap = Target − Existing savings
A worked example
Monthly expenses of 3,000, targeting 6 months of cover, with 5,000 already saved:
| Metric | Value |
|---|---|
| Target fund size | 18,000 |
| Existing savings | 5,000 |
| Gap to fill | 13,000 |
Frequently asked questions
Where should I keep my emergency fund?
In a high-yield savings account or liquid mutual fund. The priority is instant access with no exit load or penalties. Do not invest it in equity — a market crash is exactly when you might need this money.
Should I invest once I have my emergency fund?
Yes. The emergency fund is a foundation, not a wealth-building tool. Once your target is met, direct surplus savings into a SIP or lumpsum investment for long-term growth.