Emergency fund calculator.

What an emergency fund is for

It is money for things you cannot plan: a job loss, a medical bill, a car repair, a sudden flight home. It is not for a holiday, a sale or a new phone. Keeping it clear in your mind what it is for is what stops you spending it on everything else.

How many months

The standard advice is three to six months of essential costs. The right number for you depends on how stable your income is and how many people depend on it.

• Three months can be reasonable with a steady salary, no dependants and low fixed costs.
• Six months suits most people with dependants, a single income or specialist work that takes time to replace.
• Nine to twelve months is common for freelancers, commission earners and business owners.

If six months feels impossible, start with one. One month of essentials already turns many emergencies from a crisis into an inconvenience.

Which costs to count

Count only what you must pay to keep life running: housing, utilities, food, transport to work, insurance, minimum debt payments and any essential childcare or medication. Leave out dining out, entertainment and subscriptions you could pause. Your emergency fund target is smaller than your usual spending, not equal to it.

A worked example

Example only. Essentials are 2,000 a month and you want six months of cover. The target is 12,000. You have 3,000 saved, so you still need 9,000. Adding 500 a month takes 18 months. Adding 750 a month takes 12. Seeing both gives you a choice rather than a vague goal.

Where to keep it

Somewhere safe, separate and reachable: usually a savings account that is not linked to your everyday debit card. Not in investments that can fall just when you need the money. The Journal piece emergency fund: how much, and where covers this. Your country's deposit protection rules and account options differ, so check the official source for your bank.

Building it faster

Pay yourself first by moving money on payday. Direct windfalls such as tax refunds or bonuses here. Trim one bill for six months. If you carry high-interest debt, many people build a small starter fund first, then pay the debt, then finish the full fund. That order is a judgment call, not a rule.

Then use the number in Vaulta

You can set the target as a goal with a date, and the monthly amount is taken out of safe to spend automatically. See savings goals and the savings goal calculator if you want to include interest.

How the calculation is done

Target = monthly essentials multiplied by months. Gap = target minus what you have saved. Time = gap divided by your monthly amount, rounded up to whole months. Interest is ignored here to keep it simple; the savings goal calculator includes it.

Common mistakes

Counting everything you spend rather than what you must pay inflates the target and makes it feel out of reach. Keeping the fund in the same account as everyday money makes it easy to spend by accident. Forgetting to refill it after use is the quiet one: if you take 800 out for a repair, put the 800 back before you return to other goals, or the fund shrinks with each emergency until it is no longer a fund.