Emergency Fund Planning

Core Concepts

Rule of Thumb

• Employed with stable income: 3-6 months of essential expenses
• Dual-income household (both stable): 3 months may suffice (lower probability of simultaneous job loss)
• Single income, variable income, or self-employed: 6-12 months of essential expenses
• High job-search risk (niche industry, senior executive, specialized role): 6-12 months
• These are guidelines — individual assessment is essential

Essential Expenses

The emergency fund should cover non-discretionary spending only: