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How Much Money Should You Keep In Your Emergency Fund?

Samantha Rose
Samantha Rose covers financial literacy for the educational arm of OppLoans. Her work focuses on providing hands-on resources for high school and college-age students in addition to their parents and educators.
Updated on March 18, 2021
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Expect the unexpected.

How would you finance an unexpected emergency?

If you’re like many Americans, you might not be able to — four in 10 said they couldn’t afford a $400 expense without borrowing.

To weather the twists and turns in life, an emergency fund is a must. This stockpile of savings can help you through setbacks like car repairs, medical costs, and loss of income. It can mean the difference between a minor hiccup and years of debt.

So how much money should you keep in your emergency fund and how do you sock away cash to do it?

To answer these questions, we sat down with financial expert Katie Ross from American Consumer Credit Counseling. She gave us the lowdown on emergency funds: what they are, how to start one, and how much to keep in it.

Creating an emergency fund is one of the most important things you can do to boost your financial health, and it’s easier than you might think. We break it down in our first episode of OppU Answers and give you a worksheet to get you started.


Hey guys! I’m Caroline, and this is OppU Answers, the financial show where I track down real experts with real solutions for all your burning money questions. Today’s question comes from Lisa, one of our Facebook fans. She wants to know, “How much money should I have in my emergency fund for a life or medical emergency?”

That’s a great question, Lisa! After all, we never know what kind of financial craziness life is going to throw at us.

An emergency fund is a savings account that you can use in case of illness, job loss, or any other unexpected life event.

It’s different than a normal savings account, because it’s used only in case of emergency. It’s designed to act as a buffer to help you get back on your feet after something unexpected happens.

To help answer Lisa’s question, we talked to Katie Ross. Katie is a member of the American Consumer Credit Counseling management team. She’s also an expert at saving money.

Katie recommends keeping, at a minimum, three to six months’ worth of expenses in an emergency fund. To calculate how much this will be for you, you’ll need to take note of how much you spend every month on necessities like groceries, rent, and getting around.

We all know saving three to six months’ worth of expenses is no easy feat. So how can Lisa and people like her start saving before an emergency?

Katie has three foolproof ways you can start saving for an emergency right now:

First, you can take a set chunk or percentage of every paycheck and put that directly into savings.

Second, if you get a tax return, plan on putting away half of that immediately into the fund.

Third, if you work more than one job, stash the majority of your second paycheck in savings every week.

If you want to build up your emergency fund fast, put any money you have coming in that isn’t going to your living expenses directly into the fund.

To free up extra cash for your fund, try cooking at home more often, or cutting back on all those late-night Amazon impulse buys.

Follow these tips, and pretty soon you’ll be sitting on a nice nest egg. Whether or not life throws you a financial blow, you can rest easy knowing you’re prepared.

Emergency fund worksheet

Ready to start an emergency fund of your own? Use our worksheet to get started.

First, figure out how much money to save in your emergency fund by filling out the expenses in each category. List one month of expenses in each category. This should be easy ⁠— just take a look at your recipients and bills from the previous month.

Now, multiply one month of expenses by three to find the amount for three months’ worth of expenses. Do this for each category.

Add up the expenses in each category to determine the total amount needed for you emergency fund.

Now start saving!


Emergency fund worksheet to help you save three months' worth of expenses.

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