A common rule of thumb
Many advisers suggest keeping three to six months of essential costs. Essential costs are the things you must pay: housing, food, utilities, insurance, transport and minimum debt payments.
It is a guide, not a law. Two incomes, a secure job and no children may need less. One income, a variable income or a family may need more.
Work out your number
Add up your essential monthly costs, then multiply by the number of months you want to cover.
- Essential costs per month: for example €2,400.
- Months to cover: for example 3.
- Target: €7,200.
Build it in small steps
Start with one month of costs, then keep going. Set a fixed amount each month and keep it in an account you can reach but will not touch for everyday spending. In Wollie, make it a savings goal with a monthly amount and see it ticked off when the money lands.
Questions
Where should I keep my emergency fund?
In an easy-to-reach savings account, separate from your everyday account, so you are not tempted to spend it.
Do couples need one fund or two?
Either works. One shared fund is simpler, and each partner can also keep a small personal one.
This guide is general information, not financial advice.