How this calculator works
An emergency fund is money set aside for costs you cannot plan for: a job loss, a car repair, a medical bill or a sudden move. The usual rule of thumb is three to six months of essential expenses, not income. Essentials are the costs that continue even if you lose your job: housing, utilities, groceries, insurance, transport and minimum debt payments. Discretionary spending can be cut in a squeeze, so it is excluded. A household with two stable incomes can sit at the low end; a single earner, a freelancer or someone with dependants should aim higher. This calculator multiplies your monthly essentials by the number of months you choose. It also shows how many months your current fund would cover and how long it would take to fill the gap at a given monthly saving rate. It does not grow the fund with interest, which is appropriate: an emergency fund is normally held in cash or a high-interest savings account where the return is small.
Formula
Fund target = monthly essential expenses x months of cover. Shortfall = max(0, target - current fund). Months covered = current fund / monthly expenses. Months to fill = shortfall / monthly saving. In coverage mode, months covered = fund amount / monthly expenses.
Worked example
With $3,000 of essential monthly costs and a six-month target, the fund should be $18,000. If you already have $5,000, the shortfall is $13,000 and saving $400 a month fills it in 32.5 months. The same $3,000 of expenses would make a $15,000 fund last five months.
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Frequently asked questions
Should I use income or expenses to size the fund?
Expenses. If you lose your income, the fund has to cover spending, not replace the salary. Using income overstates the target for a high earner with modest costs and understates it for someone who spends more than they earn.
Where should the money be held?
In something safe and reachable within a day or two, such as a high-interest savings account or a cashable deposit. Money invested in shares can fall just when you need it, which defeats the purpose.
Should I pay off debt or build the fund first?
Both matter. A common approach is to build a starter fund of about one month of expenses, then pay down high-interest debt aggressively, then return to fill the fund. Very high interest on a card can cost more than the fund protects.
Do I need a bigger fund if I am self-employed?
Usually yes. Income can stop without notice and there may be no severance or unemployment benefit. Six to twelve months of essentials is a common target for a single-income freelancer.