How much should you save for emergencies?

You know you need an emergency fund—but how much should you put in it? The general rule is six months, but everyone’s situation is different: A single person with few financial commitments may want to save three months’ worth of expenses, whereas a family with a single breadwinner should try for nine months’ worth. These sample cases can help you figure out how much you should save for emergencies.

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People with few recurring expenses and no human dependents can put aside less for emergencies. Take Eva. She’s single and has no kids, though she does have a large dog. They live in a one-bedroom apartment in Seattle. Each month, she chips away at her $25,000 in student loans.

Eva aims to save 3 months of expenses.

$1,852
Rent
+
$254
Groceries
+
$73
Pet
+
$288
Student loan
+
$500
Other
= $2,967 x 3 months = $8,901

Sources: Zillow, March 2017; USDA, 2017; ASPCA, 2016; 6.8% interest rate & 10-year repayment; Bankrate.com

Homes, cars and kids come with regular expenses, so people with these responsibilities should aim to save more. Take the Lims: Based in Phoenix, they have three kids and two cars, and since both parents work, they pay for child care.

The Lims want their rainy day fund to cover 6 months of expenses.

$1,527
Mortgage
+
$1,205
Groceries
+
$1,426
Cars
+
$402
Kids
+
$1,142
Other
= $5,702 x 6 months = $34,212

Sources: Bureau of Labor Statistics, 2017; USDA, 2017; AAA, 2016 

Families with one income should be prepared to cover expenses for longer than 6 months. Take the Spiro family. With one car and no child care costs, they have fewer expenses, but with just one breadwinner, they want a bigger cushion.

The Spiros’ savings goal is 9 months of expenses.

$1,766
Mortgage
+
$766
Groceries
+
$713
1 car
+
$847
Other
= $4,092 x 9 months = $36,828

Sources: Bureau of Labor Statistics, 2017; USDA, 2017; AAA, 2016

Whatever size emergency fund fits your situation, it’s a good idea to keep your savings in a low-risk, accessible account. If you’re just starting to save, learn how you can build an emergency fund fast.

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The material provided on this website is for informational use only and is not intended for financial or investment advice. Bank of America and/or its affiliates, and Khan Academy, assume no liability for any loss or damage resulting from one’s reliance on the material provided. Please also note that such material is not updated regularly and that some of the information may not therefore be current. Consult with your own financial professional when making decisions regarding your financial or investment options.

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