What an emergency fund is really for
An emergency fund is money you can access quickly to absorb a shock: a car repair, a medical expense, a short income drop, an unexpected move, a family emergency.
It is not:
- a vacation budget (planned)
- “gift money” (planned)
- an investment that can drop right when you need it
In short: your emergency fund buys time. Time to choose, not to panic.
The simple formula (3 numbers)
Emergency fund = (essential monthly costs × number of months) – what you already have available.
1) Your essential monthly costs
Start from a normal month and keep only what you need to stay stable:
- housing (rent/mortgage)
- utilities + phone/internet
- basic groceries
- necessary transport
- insurance
- health
- minimum debt payments (if any)
Leave out optional spending (restaurants, shopping, leisure). In an actual emergency, those are the items you can adjust temporarily.
2) The number of months (fit to your life)
The common “3 to 6 months” advice is sometimes right, sometimes wildly off.
A practical baseline:
- 1 month: if you’re starting from zero and want to avoid panic mode
- 2–3 months: if your income is stable and you can cut optional spending quickly
- 4–6 months: if your income is irregular, your fixed costs are high, or you have dependents
If you feel like everything hits at once, start with a first milestone (1 month), then build up. (Related: when everything hits at once.)
3) What you already have available
Subtract what can actually play this role without putting you at risk:
- liquid savings you can access
- a small cash buffer you reliably keep in checking
Do not include money you’ll need soon for predictable bills (annual insurance, taxes). That’s not “emergency”, that’s “irregular but expected”.
A concrete example
Let’s say your essential monthly costs are €1,400:
- 1 month: €1,400
- 3 months: €4,200
- 6 months: €8,400
If you already have €900 available and you’re aiming for 3 months: €4,200 – €900 = €3,300 to build.
Then turn it into a plan: €3,300 over 11 months ≈ €300/month (or €75/week). If that’s too much, extend the timeline. The right plan is the one you can keep.
How to build it without punishing yourself
The classic trap is trying to go fast and burning out. A more sustainable approach:
Start with a small “cushion”
Your first milestone can be €300, €500, €1,000—whatever makes “one surprise = overdraft” less likely.
Automate a tiny amount
Even a modest recurring transfer beats big, rare efforts. If saving already feels impossible, this guide can help rebuild structure: struggling to save.
Have a refill rule
When you use the emergency fund, you rebuild it first—like repairing your safety net.
How Boney supports this (without taking over)
- Create an “Emergency fund” budget (Savings) with a weekly/monthly/yearly limit.
- Switch views without manual recalculations thanks to automatic temporality conversions.
- Keep the goal visible next to the rest of your budgets so the plan stays realistic.
- Use projections/overview to see whether you’re drifting away from your target, early.