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Sam's Economics

How big should your emergency fund be?

Your real number is your monthly gap, essentials minus any income that keeps coming, times the months you'd need to cover. See it, see how long it takes to build, and what a job loss would cost without it.

Not financial advice. A simplified model: a job loss with no income except what you enter, savings used before a credit card, no card payments until you're working again, rates held constant. Unemployment benefits, job markets and rates differ by place and change over time.

Your numbers

Defaults are Derek and Naomi from the video. Change anything.

The monthly gap

$500$15k

Housing, food, utilities, insurance, transportation, minimum debt payments.

$0$10k

Unemployment benefits, a partner's pay, other steady income.

Building it

$0$60k
$50$3k
0%6%
$1k$25k

Only used to compare with "six months of take-home pay".

If the paycheck stopped today

118
5%36%
$100$3k
0%8%
YOUR EMERGENCY FUND NUMBER
—

Monthly gap
—
Time to build it
—
A job loss without it
—

How much of your number you have

Months of your gap covered now
—
"Six months of take-home pay" would be
—

If your paycheck stopped today

Where you keep it

Interest earned in a year on your emergency fund number, and what inflation does to its buying power.

AccountInterest a yearBuying power a year

Verdict

Before you act

  • 1Add up essentials only: housing, food, utilities, insurance, transportation and minimum debt payments.
  • 2Subtract income that would keep coming. That's your monthly gap.
  • 3Multiply by 3, 6, or 9–12 months depending on how fast your paycheck would come back.
  • 4Keep it in an insured high-yield savings account, separate from checking. Not in stocks.
  • 5Start with the first $1,000, build one month at a time, and refill it after you use it.

Get the essentials worksheet, the months-of-cover guide and a month-by-month plan to build your fund.

Download the PDF guide

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Illustrative estimate only, not financial advice. Your number = (essential spending − income that keeps coming) × months of cover. Savings grow monthly at the APY, with your monthly amount added at the end of each month. Job loss: savings cover the gap first, the rest goes on the credit card, interest is charged monthly at the card rate ÷ 12 and nothing is paid on the card until you're working again; then the fixed payment you enter clears it. Buying power uses (1 + savings rate) ÷ (1 + inflation). Defaults: $4,000 essentials, $1,500 unemployment benefits, 6 months, $2,000 saved, $500 a month, 4.2% APY (top high-yield savings, Oct 2026) vs 0.37% (FDIC national average), 22% card rate (Federal Reserve, Aug 2026), 3.7% inflation (BLS CPI, Sept 2026). In the US, the average job search was 24.8 weeks and the median 11.5 weeks in September 2026 (BLS).