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Emergency Fund Calculator

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Ben Franklin famously wrote that nothing can be certain in this world, except death and taxes. Old Ben might have wanted to add emergencies to that list.

No matter how well we plan, emergencies arise. And that's why it's so important to have an emergency fund, a sum of money that can cover our living expenses while we get back on our feet. Here, we'll cover how much we might need in emergency savings and smart places to consider storing our financial safety net.

Use our emergency fund calculator below to get started.

Emergency Fund Calculator

Includes mortgage or rent payments, property taxes, home or renter’s insurance, HOA fees, and household repairs

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Includes water, garbage/recycling, gas, electric, phone, internet, and cable

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Includes gas, car payments, car insurance, public transit, and ride shares

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Includes groceries, take-out, and restaurants

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Includes credit cards, loans and other mortgages

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Includes health insurance, doctor and dental bills

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Includes personal care, child care, taxes, other insurances, and leisure

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Here's how much you should try to save for an emergency:

(6 Month Emergency Fund)

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Current monthly spending:

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Fill out the inputs to see how much you should save for an emergency fund. The total will be 6 times your monthly amounts

How much should I have in an emergency fund?

Three to six months' worth of living expenses.

(At least, that's the general rule-of-thumb.)

If you're not quite sure how much you need, the above emergency fund calculator can help you develop an emergency savings goal.

If you're too busy to crunch the numbers, start with a goal of saving a set amount from each paycheck -- even if it's just $10. Getting started with saving is more important than having an absolutely perfect savings goal.

How to start an emergency fund

Anyone can build an emergency savings fund. Here's how:

  1. Set an emergency savings goal (optional -- you can start without a goal!)
  2. Figure out how much you can commit to saving each month, after your most important bills (like rent and loan payments) are taken care of.
  3. Stick to your plan.

What is the best place to keep an emergency fund?

The best place to keep an emergency fund is somewhere stable and accessible, like:

It can help to have your emergency savings in a different account than your regular spending money. This way, you won't need to worry about keeping track of how much you have saved. You also won't accidentally spend your emergency fund.

RELATED: Check out The Ascent's guide to the best credit card for emergencies.

TIP

What about a regular savings account?

Emergency savings funds can be kept in a regular savings account, but that's not necessarily the best place to keep them. Here's why: The interest on regular savings accounts doesn't always keep up with inflation. So over time, your account could actually decrease in value. Consider opening an account that provides a higher interest rate, while still allowing access to funds if an unexpected expense arises.

Your emergency fund shouldn't be in stocks (not stable) or your home value (not accessible).

High-yield savings account

What it is: A high-yield savings account is like other savings accounts -- but it pays a higher interest rate.

Online banks don't have as many operating costs as brick-and-mortar banks, so they can afford to offer higher interest rates.

Where to find it: Most of these accounts are at online-online banks.

Certificate of deposit (CDs)

What it is: A "share certificate" or "certificate of deposit" (CD) is simple and stable. It's similar to a savings account, with a few key differences:

  • You'll put all your money in at once.
  • You'll promise to leave your money untouched for a set period of time.
  • When it's time to take money out, you'll take it all out at once.
  • You'll pay a penalty if you have to withdraw money early.

To learn more about CDs, head to our guide: What is a CD?

Where to find it: You can open CDs at most banks and credit unions.

Money market account

What it is: If a checking account and savings account got married, a money market account (MMA) would be their kid. With an MMA, you can:

  • Save a little at a time
  • Take money out when you need it
  • Get a debit card and checks linked to the account
  • Earn interest

To learn more about money market accounts, check out our guide: What is a money market account?

Where to find it: You can get an MMA online, or walk into your neighborhood bank and open an MMA there.

FAQs

  • The rule of thumb is that individuals should have enough in an emergency fund to cover three to six months of living expenses.

  • Add up essential living expenses for one month and multiply that amount by either three or six (this will depend on how much you're most comfortable having in case of emergency).

  • The "best" place depends on your own personal financial situation, but a high-yield savings account, certificate of deposit, or money market account are all FDIC-insured and offer a higher interest rate than a traditional savings account.

  • It can be accomplished in four steps:

    1. Set an emergency savings goal
    2. Determine how much you can put away each month
    3. Pay yourself first, before other expenses are paid each month (as long as you have enough income to cover your total monthly living expenses)
    4. Stick to your plan, no matter how tempted you may be to use emergency savings for another purpose.

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