How big should your emergency fund be?

The common guideline is three to six months of essential expenses. That's a target, not a starting line. What matters most is knowing your number and getting started.

Count essential expenses only

• Housing: rent or mortgage, insurance, property taxes
• Utilities, phone and internet
• Groceries (not eating out)
• Transportation and car insurance
• Health insurance and regular medications
• Minimum debt payments
• Childcare you'd still need

Aim higher if

• You're the only earner in your household
• Your income is irregular, seasonal or self-employed
• Your industry has long job searches
• You have health issues, dependents or an older car or home

Aim lower to start if

• You have high-interest debt to pay down
• You have two stable incomes
• You're just starting out: a first goal of $500 or one month is a great start

General educational information, not financial advice. Penny Vaults isn't paid by any bank or lender.