How much money should I have in my emergency fund?

Dionna Poluch, CFP®
Aug 25
 min read · 
Financial planning
Emergency Fund Tips and Tricks

Emergency Fund Tips and Tricks

Table of Contents

Have you ever experienced unexpected expenses that completely threw off your budget? Or perhaps lost your job and struggled to make ends meet? Life is full of surprises, and not all of them are positive. That's where an emergency fund comes in handy.

What is an Emergency Fund?

An emergency fund is simply a sum of money that you set aside specifically for unexpected expenses or loss of income. Think of it as a financial safety net. It's there to protect you from the financial impact of a surprise expense, like a medical emergency, car repair, or sudden job loss. It's also commonly referred to as a rainy day fund.

How Much to Save 

So, how much should you save in your emergency fund? As a general rule of thumb, financial experts recommend saving three to six months' worth of living expenses. However, the amount you save will vary based on your individual circumstances. For example, if you have dependents or a mortgage, you may want to consider saving more. Another factor to consider is the number of incomes in your household. If you are a single-income household, you may need to save more to offset the possibility of losing a job. 

Where to Keep Your Emergency Fund

A great place to keep your emergency fund is in a high-yield savings account, as it has a higher interest rate than a traditional checking or savings account. A money market account is another great option, as these funds typically include very conservative investments.  You will want to ensure your emergency fund is liquid, so that you can withdraw funds quickly if needed. 

Start small

An emergency fund helps protect you from the unexpected and gives you peace of mind. Determine the amount you need to save based on your current and future financial obligations, and choose a safe and accessible place to store your money. Start by prioritizing your first $1,000, and continue saving gradually to ensure your emergency fund is sufficient when you may need it.

Important Disclosures:
Domain Money Advisors, LLC is providing this information for informational purposes only. While Domain Money Advisors, LLC believes that the information contained herein is reliable and derived from reliable sources, it makes no representation, warranty or undertaking, stated or implied, as to the accuracy or completeness of the information. Domain Money Advisors, LLC, and its parent company, Domain Money, Inc., expressly disclaims any liability or loss incurred by any person who acts on the information, ideas or allocations discussed. The information contained herein is not, and shall not constitute financial or investment advice, an offer to sell, a solicitation of an offer to buy or an offer to purchase any securities, nor should it be deemed to be an offer, or a solicitation of an offer, to purchase or sell any investment product or service.  No investment advisory relationship has been formed between Domain Money and the reader.  Investing comes with inherent risks and you should always invest within your means and risk tolerance.  Past performance is not an indication of future returns and you should always consult a financial advisor prior to making investment decisions. Please see important disclosures at

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