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Emergency fund calculator: how many months?
Before trying to beat inflation, separate money that cannot tolerate short-term loss. An emergency fund is a buffer that helps prevent a job loss, medical bill or family expense from forcing an asset sale at a bad time.
Estimate the target and gap
The right number of months depends on job stability, dependants and insurance; there is no universal target.
Target: $20,000. Remaining gap: $10,000. Current savings cover about 3.3 months of essentials.
This excludes inflation, interest and insurance payouts. Essentials are the costs that cannot quickly be cancelled: housing, food, medical care, transport and dependants.
More is not automatically better
Too little cash makes a shock more disruptive; too much can leave substantial purchasing power exposed to inflation. Start with liquidity, then adjust the months for household responsibilities and income stability.
After setting the buffer, read how much to allocate and use the rebalancing calculator.