Emergency fund: How big does yours need to be?

ORLANDO, Fla. – A Bankrate survey found that 28 percent of U.S. adults have no cash savings at all. And 46 percent don’t have the equivalent of three months of expenses saved. Experts say an emergency fund is vital for your financial well-being, but just how much should you put away?

Even if money isn’t a problem now, financial advisers say everyone should have an emergency fund. It’s what will keep you going if you lose your job or experience a financial crisis.

At the bare minimum, experts say to put away three months’ worth of savings, but six to nine months is ideal.


Calculate what your basic monthly living expenses are. Cut out unnecessary spending like vacations, gifts, and dining out. Typically this will reduce your average monthly expenses by 30 percent or more.

Start saving

Even if it’s slow, start saving. If you put aside $50 each week, you will save $2,600 in a year. Make it $100 a week and that’s $5,200. Several online calculators can help you plug in your expenses to come up with the magic emergency fund number.

Helpful apps

Apps like PlentyFi allow you to ask others to contribute to your savings goal via social media. Smart Deposit makes automatic transfers from your checking account to an investment account when you have extra cash. Digit analyzes your income and spending to find money to safely set aside. 

Where to stash the cash

Many people wonder where they should keep their emergency fund. A high-yield savings account is typically a good place to store your cash. Experts also recommend keeping the funds in an account other than your daily banking account.