WorthMorrow

Emergency Fund Calculator

This calculator turns your essential monthly costs into a target emergency fund for the number of months you choose, and shows how much of that target your current cash covers. It is for anyone deciding how big a cash buffer to hold.

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Educational estimates, not advice. Results depend on the assumptions you enter and are not predictions or personalised financial, investment, tax or legal advice. Read the financial disclaimer.

Calculator

Essential costs per month

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Target emergency fund

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Months covered today

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Progress to target

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Essential monthly costs

Your cover and cash

Rules of thumb. Your circumstances decide.
Used only to estimate yearly interest on what you hold today.

Reserve status

Gap to target

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Estimated yearly interest today

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Progress to target –

Where your essential costs go

  • Housing
  • Utilities
  • Food
  • Transport
  • Health
  • Debt

How the calculation works

Your essential monthly costs are added together. The target fund is that total multiplied by the number of months you choose. The gap is the target minus your current cash, and months covered is your cash divided by monthly essential costs.

Target fund = essential monthly costs × months of cover

Key assumptions

  • Only essential costs are counted. Discretionary spending is excluded on the basis that it can be cut in an emergency.
  • Your costs stay the same. Rent, insurance and family changes move the target.
  • Insurance, government support and family help are not netted off.
  • The yield is for illustration and is not guaranteed.

Worked example

Essential costs of 1,600 + 280 + 450 + 180 + 250 + 300 = 3,060 a month, six months of cover, 6,500 saved today, 4.5% yield (figures in US dollars):

  • Target fund: 3,060 × 6 = 18,360
  • Gap: 18,360 − 6,500 = 11,860
  • Current cover: 2.1 months (35.4% of the target)
  • Estimated yearly interest on today's balance: 293

How to interpret the result

Months covered is the most intuitive result: it says how long your essentials could be paid from cash alone. A gap is not a failure; it is the distance to a goal. If the gap feels large, a first milestone of one month of essential costs is a sensible start.

Common mistakes

  • Including discretionary spending in the essentials.
  • Choosing the number of months by habit rather than by income stability.
  • Counting investments that could fall in value as part of the reserve.
  • Forgetting to update the figures after a move or a change in insurance.