Emergency Fund
An emergency fund is cash set aside to cover unexpected, necessary expenses — a job loss, medical bill, or major repair — without borrowing. The standard target is three to six months of essential expenses, kept in a safe, instantly accessible account like a high-yield savings account.
Size it on lean-month spending rather than income — housing, food, utilities, insurance, transport and minimum debt payments, with the discretionary spending removed, since that is what a real emergency would cut. The distinction usually shrinks the target by about a third: a household spending $4,800 a month might have a lean month of $3,200, making six months $19,200 rather than $28,800. Where you sit in the range depends on how long replacing your income would take, so a single earner or a specialised role argues for more than a dual-income household in general fields. A $1,000 starter fund comes first, before anything but the highest-interest debt, because it stops the next surprise becoming a 23% balance.
Put it to work
Emergency Fund Calculator
Size your emergency fund from your real monthly expenses, see the gap, and get the date you'll be fully funded at your current saving rate.
Savings Calculator
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