Question 1

How much should I keep in an emergency fund?

Accepted Answer

A common guideline is 3-6 months of essential expenses for salaried employees with stable income, and 6-12 months for freelancers, business owners, or anyone with variable or less predictable income.

Question 2

What counts as an "essential expense" for this calculation?

Accepted Answer

Rent or EMI, groceries, utilities, insurance premiums, and minimum debt payments — the costs you would still need to cover even with no income. Discretionary spending like dining out or entertainment is usually excluded from this baseline.

Question 3

Where should I keep my emergency fund?

Accepted Answer

It should be kept somewhere safe and easily accessible — a savings account, sweep-in fixed deposit, or liquid mutual fund are common choices — rather than in equity investments, since you may need to access it quickly and without market-timing risk.

Question 4

Should I build my emergency fund before investing elsewhere?

Accepted Answer

Most financial planners recommend having at least a partial emergency fund in place before aggressively investing in equity, since an emergency without a fund often forces people to sell investments at a bad time or take on high-interest debt.

Emergency Fund Calculator

This is your safety net target

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