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How Much You Need in Your Emergency Fund

More than half of you are still building up savings for a rainy day or haven't been able to save anything just yet. In order to be sure you're on track or to set a goal in the first place, you need to determine how much you'll need if emergency strikes. The biggest case for an emergency fund is job loss — if you lose your job or temporarily lose your ability to work then you'll need to rely on the money you've saved to get by.

Standard advice says that a solid emergency fund has three to six months of living expenses. Determining our individual (or family) living expenses is necessary to know if we're on track to support ourselves without income for a few months. CNN Money recommends reviewing the past three months of bills and expenses to figure out a monthly average. They remind us to include certain expenses in our calculations. Check out its must-include expenses when you


  • Mortgage (or rent)
  • Utilities, including bills for cable, Internet, landline, and cell-phone service.
  • Groceries.
  • Insurance premiums, including home, auto, and life. Add in at least $400 for individual health insurance — 1,000 for a family — in case the partner whose work provides it is the one to get laid off.
  • Other car expenses including gas and loan payments.
  • Property tax (if not included in the mortgage payment)
  • Discretionary spending. Be realistic! Certain things may be easy to cut, but don't delude yourself into thinking you can suddenly make a drastic change.


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