Emergency Fund Calculator: Build Your Safety Net

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Emergency Fund Calculator

Think fast: How long could you afford to live if you lost your job? According to a much-publicized survey from Bankrate, over two-thirds of Americans couldn’t survive a single month. That’s why it’s crucial to build your emergency fund. This guide will provide you with an emergency fund calculator to help you plan for the unexpected.

What is an emergency fund?

An emergency fund is simply a savings account used to cover unforeseen expenses. Your emergency savings can be used for:

  • Car repairs
  • Home repairs
  • Job loss
  • Unpaid medical bills
  • Property damage

Even if your emergency fund is small, you can at least mitigate the impact of mid to large-size emergency expenses.

How much to save in your emergency fund

The most common advice is to aim for at least three to six months’ worth of your monthly living expenses. But the actual number can vary from person to person. You might adjust your savings goal based on your current income or projected expenses.

Think about the amount you’ll need to cover your most common living expenses, such as:

  • Mortgage payments
  • Utilities
  • Rent
  • Debt payments
  • Car payments
  • Student loans
  • Medication
  • Groceries

What might this look like? Imagine that you have the following monthly expenses:

  • Mortgage payment: $1,500
  • Groceries: $300
  • Car payment: $200

This means your total monthly expenses will come to $2,000. If you want to protect yourself for three full months, you should aim for an emergency fund amount that totals at least $6,000.

Why having a safety net is important

An emergency fund can provide a vital safety net for your finances. This can give you greater peace of mind when it comes to your personal stability. 

Additionally, if you don’t have an emergency fund, you may be forced to deplete your hard-earned regular savings. You might also be forced to use a credit card, but that only invites interest charges and a risk to your credit history. An emergency fund can give you the money you need without these risks.

Where to keep your emergency fund

Don’t just use a checking account for your emergency savings. Consider the following types of accounts that can help your money grow even in the short term.

1. High-yield savings account

As the name suggests, a high-yield savings account offers a competitive interest rate. That way, your money can grow through interest while still allowing you to make withdrawals when you need to without any penalties. This might be a good option when you’re facing other risk factors, such as a high number of monthly payments.

2. Certificates of deposit (CDs)

Certificate of deposit (CD) accounts provide a high-interest rate when you deposit a fixed amount of savings for a predetermined period. 

But be careful. While this is a great plan for growing your wealth in the short term, most CD accounts won’t let you withdraw money before the maturity date without incurring a penalty. This makes CDs a better choice for people needing to cover large, unplanned expenses, such as medical bills or costly automotive repairs.

3. Money market account

Money market accounts (MMAs) offer high-interest rates, but they also offer the convenience and flexibility of regular withdrawals. Some banking centers even offer checks and debit cards for greater convenience.

However, your bank may limit the number of withdrawals or checks or require a certain minimum account balance. Make sure you understand your bank’s requirements.

How to start an emergency fund in 5 steps

Starting an emergency fund is easier than you might think. Get started today by following these simple steps:

Step 1: Set a savings goal

Start by setting a clear goal for your emergency fund. Not sure where to start? Use the MoneyLion emergency fund calculator to estimate your baseline savings goal*. Even $1,000 can serve as a valuable safety net in an emergency. 

MoneyLion new savings calculator* can show you how much your savings can potentially grow over time and shows you available savings offers from our partners!

See how much you can save

Use our free savings calculator to estimate your investment growth over time.

Initial deposit




Monthly contributions


Save for (years)


Future projections based on your selections


Estimated Interest*

Total Savings*

*The estimated projections are hypothetical in nature and do not guarantee future results.

Step 2: Create a budget

If you don’t already stick to a monthly budget, now’s the time to start one. Many experts recommend the 50-30-20 approach, where 50% of your monthly income goes to your monthly bills, 30% to your hobbies and entertainment, and 20% to your savings and investment accounts. 

Your goal is to create a budget (or adjust your existing one) so that a portion goes to your emergency savings, at least until you reach your savings goal from step 1.

Step 3: Open a separate savings account

Once you have a plan, your next step is to open an account that will be exclusively used for your emergency savings. Using the same bank as your regular savings/checking account may make it easier for you to transfer money, though you can also shop around for high-yield accounts offered by other banking institutions.

Step 4: Set up automatic transfers

Save money the easy way by setting up an automatic transfer with your bank. For instance, you can set up monthly transfers to divert money from your checking account to your emergency savings. That way, you’ll never forget to contribute to your fund and can grow your savings over time.

Step 5: Stay committed and reassess regularly

You don’t have to build your emergency fund all at once. But if you stick to the above plan, you’ll have an easier time reaching your savings goal. Making regular contributions ensures that you’ll build your cushion over time and be prepared for a rainy day.

But your emergency fund is meant to be a short-term solution. Once you reach your goal, make sure to keep making contributions to your regular savings account.

Lifeline in Times of Crisis

Building an emergency fund is a crucial step towards financial security and peace of mind. By setting aside a portion of your income for unexpected expenses, you can protect yourself and your loved ones from financial hardship. Start small, be consistent, and prioritize saving for a better and more stable future.


What should you do if you don’t have enough money to build an emergency fund?

Contribute however much you can. Even small deposits can slowly accumulate to $500 to $1,000 to protect you in an emergency.

How do you decide which expenses can be covered by your emergency fund?

Any unexpected expense can be covered by your emergency fund. Start by focusing on regular living expenses, but also account for costs like fixing your car or an uncovered medical bill.

Should you include debt payments in your emergency fund calculation?

When using an emergency fund calculator, it’s a good idea to account for all your monthly expenses. This can include debt payments if you make them regularly.

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