Emergency fund calculator: how much should you keep aside?
An emergency fund keeps the household running if your income stops for a while, after a job loss, an illness or a business going quiet. The bills that matter are the ones that keep coming: living costs, rent, loan EMIs and school fees. This calculator adds those up for the months you choose and shows how far your savings already go.
Your figures stay in your browser. Nothing is sent anywhere until you choose to start the full assessment.
Open the calculator to work out your own figure.
How the number is worked out
- Monthly outgoings: your living costs, plus rent, plus every loan EMI, plus school or college fees for each child. EMIs are counted because the loan is still owed when the income stops.
- Each month you want covered is costed at today’s outgoings grown by 6% a year inflation to when that month falls due, so the sixth month costs slightly more than the first.
- Those months added together are the fund you need.
- Minus the cash, savings accounts and fixed deposits you can reach straight away. What is left is the gap to build towards.
A worked example
Anita and her husband spend about ₹45,000 a month on living costs, pay a home loan EMI of ₹25,000, and have 2 children whose school fees are ₹6,000 a month each. They have ₹1.80 L in savings accounts and FDs.
Their monthly outgoings come to ₹82,000, so 6 months of cover needs about ₹5.00 L. Their savings cover about 2.2 months, leaving a gap of ₹3.20 L. Counting living costs alone would have suggested ₹2.75 L, enough for only 3.3 months of what they actually pay.
| Living costs | ₹45,000 |
| Loan EMIs | ₹25,000 |
| School fees | ₹12,000 |
| Monthly outgoings | ₹82,000 |
| Fund needed for 6 months | ₹5.00 L |
| Savings and FDs | − ₹1.80 L |
| Gap | ₹3.20 L |
Assumptions
- Inflation is 6% a year, the same as the full assessment.
- The fund covers 6 months of outgoings unless you choose otherwise.
- Only money you can reach within a day or two counts. Shares, mutual funds you would have to sell at a loss, gold and property are not counted.
- Health emergencies are not part of this figure; they are what health insurance is for.
Frequently asked questions
How much emergency fund should I have?
Enough to pay everything that keeps coming each month, living costs, rent, EMIs and school fees, for as long as it might take to replace your income. Six months is a common starting point. A single income, irregular earnings or a job that would be hard to replace argue for more.
Should loan EMIs be included?
Yes. A lender expects the EMI whether or not you are earning, and a missed EMI damages your credit record. Leaving EMIs out is the most common reason an emergency fund turns out to be too small.
Where should I keep my emergency fund?
Somewhere safe that you can reach within a day or two: a savings account, a sweep-in or fixed deposit you can break, or a liquid fund. It should not be in shares or anything whose value could fall just when you need it.
Should I use my emergency fund for medical bills?
It can help with costs a policy does not pay, but it is not a substitute for health insurance. A single hospital stay can cost more than several months of expenses, so keep both.
Is this financial advice?
No. It is an educational estimate built from the figures you enter. For advice on your whole situation, speak to a SEBI-registered investment adviser.