How much should I have in my emergency fund?
An emergency fund is money that you’ve saved for unexpected bills and costs. Add your essential monthly outgoings and choose how many months of cover you want.
Your essential monthly outgoings
Months of cover
Three months is a common starting point; six months gives more comfort if your income varies.
What is an emergency fund?
An emergency fund is money set aside for the unexpected: a job loss, a car repair, a medical bill, a broken boiler. It lets you handle a shock without a loan or a credit card, and without touching the savings meant for your projects.
How much to set aside
The usual rule is three to six months of essential expenses — housing, bills, food, transport and insurance, not total spending. Aim for three months with two stable incomes, six months or more if you are self-employed, a single-income household, or have children.
Worked example
A household spends 2,400 a month on essentials. Three months means 7,200, six months 14,400. With 3,000 already saved and 400 put aside each month, the three-month target is reached in about 11 months and the six-month target in about 2 years and 4 months.
Where to keep it
Keep it on an instant-access savings account, separate from your current account so it is not spent by accident. Availability matters more than return. Build it before investing or starting a large project.