How Much Should You Have In Your Emergency Fund?

Updated: Jun 27, 2021

According to the September 2020 edition of COVID-19 FInancial Impact Series, about 61% of Americans have depleted their savings and won’t be able to carry on till the end of the year as a result of the pandemic. This financial stress means that three out of every five Americans will be thrown off balance by certain kinds of emergencies, which might leave you wondering how much money you should set aside for emergencies.

One of the financial loops that most Americans get trapped in is living from paycheck to paycheck. This makes it difficult to set aside savings. An easy way to find out if you are in this loop is if an unplanned expense puts you under undue pressure.

According to a survey conducted by Bankrate, only 39% of Americans can pay for one thousand dollars in emergency expenses without assistance. So what is the ideal amount of money a person should have set aside for unforeseen circumstances?

Financial experts advise that on average, an individual should have an emergency fund that is equal to three to six months of their normal living expenses. For people who have secure employment, emergency funds should be equal to three months’ living expenses. For those with insecure work, the emergency fund should cover six months of living expenses.

How much should you save to build up your emergency fund?

As good as the aforementioned advice is, having three to six months’ worth of funds on hand may not be applicable all the time. When deciding on the size of your emergency fund, there are a number of factors you can take into account to build up a more nuanced picture of what will suit your needs.

  • The nature of your earnings: The ideal size of your emergency fund is affected by the nature of your earnings. If your income is irregular you may need a larger emergency fund to make up for possible income gaps. An independent contractor for example may need to have a cash reserves that can cover up to 12 months of living expenses.

  • The security of your job: Some jobs enjoy a higher measure of security than others. Certain skills are in demand all year round, whereas others are more seasonal. If the service you offer is in high demand, it may be easier to pick up work on short notice, meaning you may not need as large an emergency fund as someone whose job is tied to more fluctuating demand.

  • The nature of your needs: Think about how many people you may need to support in the event of an emergency. A single person may need to have an emergency fund that is less than that of a person with a family. The larger the number of dependents, the larger the emergency fund needs to be.

  • The return on your savings: Existing solutions such as low-interest savings accounts and fee-laden financial services are not ideal for a post-pandemic world. With Qinta, you can earn up to 10% on your savings and reach your financial goals faster. Sign up for early access here.


Your emergency fund should be tailored to your individual needs. The outline above gives you a framework to start but you may have to tailor it down to your individual needs.

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