Emergency fund calculator
Emergency fund calculator
An emergency fund is an important part of your financial planning. This is money that you set aside specifically for unexpected events like job loss or a medical emergency. Ideally, you should have enough money saved up to cover three to six months of your normal expenses. That may seem like a lot, but it’s really not that hard to do if you start small and add to your fund regularly. Use our emergency fund calculator to help you get started.
Why You Should Have an Emergency Fund
You should have an emergency fund for the simple reason that you never know when you’re going to need it.
Think about it: you could lose your job, your car could break down, or you could have to deal with a medical emergency. If you don’t have any money saved up, you’re going to be in a lot of trouble.
But if you do have an emergency fund, you’ll be able to handle whatever comes your way. You’ll be able to pay your bills, get the repairs done on your car, and pay for whatever medical expenses come your way.
So how much should you have in your emergency fund?
That depends on your own personal situation. But a good rule of thumb is to save up enough money to cover six months’ worth of expenses.
That might seem like a lot, but it’s really not. If you think about it, most people only need a few hundred dollars to cover their expenses in an emergency. So if you can commit to saving $50 or $100 per month, you’ll have your emergency fund ready in no time.
And to make it even easier, we’ve created an emergency fund calculator that will help you figure out how much you need to save. Just enter in your monthly income and expenses, and the calculator will do the rest.