How much emergency fund should I have?

A good emergency fund target is 3–6 months of essential expenses. If your income is variable, you have dependents, own a home, or work in a harder-to-replace job, aim closer to 6–12 months. If you’re single, have stable income, and low fixed costs, 3 months may be enough.

Practical way to calculate it:

1. Add only essential monthly costs: rent/mortgage, utilities, groceries, insurance, minimum debt payments, transportation, childcare, prescriptions, and basic phone/internet.
2. Multiply that number by your target months.
3. Keep it in a safe, liquid account, such as a high-yield savings account or money market account—not invested in stocks.

Example: if your essentials are $3,000/month, a solid target is $9,000–$18,000. Start with a first milestone of $1,000–$2,500, then build toward one month, three months, and finally your full target.