Not sure how much to stash away for a rainy day? The Money Milestones emergency fund calculator helps you work out how much money to set aside for unexpected costs, whether it’s a broken boiler, a surprise bill, or a patch between jobs. If you want to learn more about emergency funds, including how to build one and where to keep it, check out my full guide.
How to calculate your emergency fund with this tool
It’s really simple to use! Just follow these steps:
- Select your safety level:
- Basic (2 months). The absolute minimum for an emergency fund, covering 2 months of essential outgoings.
- Normal (3 months). The most common choice, giving you a 3-month buffer for peace of mind.
- Safe (6 months). Ideal if you have irregular or unstable income, this gives you a more comfortable 6-month cushion.
- Enter your main monthly outgoings:
- Housing. Your monthly rent or mortgage payment.
- Utilities. Regular bills like gas, electricity, water, broadband, and mobile phone contracts.
- Food. Groceries, takeaway, restaurants, and work lunches.
- Other. Anything else essential, such as council tax, childcare, car costs, insurance, subscriptions, etc.
Emergency fund calculator: how much should you save?
Important considerations
- This tool provides a ballpark figure. The amount you need in your emergency fund will depend on your unique circumstances. While the calculator offers a solid starting point, you may need more or less depending on factors such as job stability, lifestyle, and health.
- Emergency funds are for genuine emergencies. Only dip into your emergency fund for unexpected costs, such as medical bills, urgent car repairs, or if you lose your job. It’s not for regular expenses like holidays or big purchases!
- Your Emergency funds should be liquid. This means it must be easily accessible when you need it. Avoid investing it, putting it in a notice account, or anything else that could affect its liquidity.
- Consider other forms of financial security. In addition to building your emergency fund, think about other ways to protect your finances. For example, check out my article on saving vs investing for more insights.
- If you’re in debt, it might make more sense to focus on paying off high-interest debt before building your emergency fund. If you’re struggling with debt, free and confidential advice is available from the National Debtline.