How much of a safety net do you need?

Emergency fund

Work out your ideal emergency fund target based on essential monthly expenses and months of cover.

Formula

target = monthly essential expenses × months of cover

Assumptions

• "Essential expenses" should exclude discretionary spending for a realistic target.

Frequently asked questions

How many months of expenses should I save?
3-6 months is a common guideline, though freelancers, single-income households, or those in less stable jobs often aim for 6-12 months instead.

Should this include rent, groceries, and debt payments?
Yes — "essential expenses" should cover everything you'd still need to pay if your income stopped: housing, food, utilities, insurance, and minimum debt payments. Leave out discretionary spending like entertainment or travel.