How Much Should I Have In An Emergency Savings Fund?

How to protect yourself from the inevitable rainy day.
Colby Brin
August 10, 2022
min read

An emergency fund is money that you set aside to cover expenses in case you suffer some sort of financial crisis, like losing your job, getting sick, splitting with your partner, or needing massive home repairs. It’s a financial safety net.

Your emergency savings fund should cover at least three months of your inflexible expenses, like rent, heating, groceries and other core necessities.

In this article, we’ll cover how much should be in an emergency fund, where to keep an emergency fund, and where you can find a good emergency fund calculator.

How Much Should An Emergency Fund Be?

Your emergency fund should cover at least three months of expenses, but six months is ideal. So if you can afford to, don’t stop at saving when you reach that three-month threshold.

The best place to keep your emergency fund is in a high-yield savings account. That way, you’ll be able to access it quickly if you need it, but it will also grow in the interim.

Emergency Fund Calculator

You should calculate your emergency fund by adding up your inescapable expenses, like rent, heating, and groceries, multiplying that number by three months, and subtracting the amount you already have saved up.

Fortunately, you don’t have to do this on your own. There are many websites that have free emergency fund calculators, like HSBC.

Why is it important to have an Emergency Savings Fund?

It’s important to have an emergency fund because it’s almost inevitable that at some point in your life, you’ll be hit with a nasty surprise. If you have an emergency fund, you’ll be able to handle it. If you don’t, you might find yourself in a real bind (to put it mildly).

Here are some common reasons to have an emergency saving fund:

Sudden Loss of Income

No matter how secure your job is, there’s always the possibility the unexpected could happen. For instance, you might fall ill, or your employer might suffer a major setback through no fault of your own. In such cases, your income could evaporate without warning, and you might have trouble paying for your basic expenses.

But if you have an emergency fund, you’ll at least know that those will be covered.

Unexpected Expenses

There’s also the possibility that you might one day be faced with unexpected expenses. This could be a sickness in your family, home or car repairs, or just a major increase in the price of your monthly bills.

Family Safety

It almost goes without saying that an emergency fund isn’t just for you. It’s for your family, too. If you have loved ones whom you take care of, and God forbid something happens that cuts off your income, you’ll want to know that they’re protected as well.

High Living Costs

If you live somewhere with a high cost of living, like London or another big city, it’s important to have a larger emergency fund (let’s say closer to six months than three). This is because unforeseen costs in a time of crisis will naturally be higher than if you lived somewhere where prices are less extreme.

Job Security

If you work in an industry where layoffs are not uncommon, or you’re self-employed, or a freelancer or contractor, you would also benefit from having a larger emergency fund. This is because getting back on your feet might take a little longer than if you worked in a sector where it’s relatively easier to find a new job.


If you have a high debt-to-income ratio, it’s also important to keep a larger emergency fund. This is because your debt won’t take a timeout for you in your time of need. You’ll still need to cover any payments on it in addition to all of your other expenses.

Saving for a Goal

In reality, your emergency fund is probably the most important thing you can save up for — even above a home, child’s education, wedding budget or car. That’s because, if you have some bad luck and suffer major financial distress, all of those other things will automatically be in jeopardy. Your emergency fund is your safety net for everything else you save up for.

Tips for Building Up Your Emergency Savings Fund

Here are a few tips to help you build up your emergency savings fund:

1. Set A Goal

Remember, your emergency fund should be at least three to six months of your essential living expenses. And you should try to reach that goal before saving up for anything else. To ensure you stick to your saving goal, add a dedicated section for your emergencies in your monthly budget.

2. Automate Your Savings

A  great way to start building your emergency fund is to set up a direct deposit from paycheck into your savings account. If it’s automated, you won’t have to think twice about it, and with consistent payments, you’ll reach your goal faster.

3. Make cuts

Take a look at your budget and see where you can make some cuts to save more money. Any extra cash you can put aside will help you build up your emergency fund more quickly.

4. Get creative

If there are any ways you can boost your income, that will help you reach your emergency fund goal faster as well. Could you have a car-boot sale? Sell unused items on eBay? How can you get a raise at work, or even a new, higher-paying job?

5. Stay Disciplined

Needless to say, you have to resist the temptation to dip into your emergency fund for non-emergency expenses! If you do absolutely have to use the money, make sure you replenish it as soon as possible.


By following these tips, you can make sure you're prepared for anything life throws your way.

An effective way to start saving for your fund is to use an app that makes it simpler to budget your money. For instance, the HyperJar app lets you transfer money from your bank account and separate it into different virtual jars, like ‘Rent’, ‘Car’, ‘Groceries’, etc.

Organising and visualising your spending habits will make it easier to save.

Colby Brin

Head of Copy

Colby Brin is Head of Copy at HyperJar. With over 17 years of professional writing experience, Colby’s been a journalist, ghostwriter, language consultant, and writing trainer. Having previously served as Head of Copy at Wise, he’s worked in fintech for over six years. A native of New York City, Colby graduated from the University of Michigan, and has lived in London for two years.

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