Emergency Fund Planner

Demo

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---
name: Emergency Fund Planner
description: Sizes and builds an emergency fund based on income stability, fixed expenses, and household risk profile. Use when starting a fund or reviewing financial safety net adequacy.
---

# Emergency Fund Planner

An emergency fund is not a savings account — it is insurance against being forced into high-interest debt during a crisis. The right size and the right account matter as much as having one at all.

## Determine the Right Size

The standard recommendation is 3-6 months of essential expenses. Essential expenses are the costs that cannot be paused: rent or mortgage, utilities, groceries, minimum debt payments, insurance premiums, and transportation. Calculate this number by tallying only those categories, not total spending.

Adjust the target based on risk profile:
- Stable two-income household: 3 months is sufficient.
- Single income, stable employment: 4-5 months.
- Single income, variable or freelance income: 6 months minimum.
- Single income, specialized field with long job search timelines, or health risks: 6-9 months.

## Where to Keep It

The emergency fund must be liquid and safe — it cannot be in the stock market or locked in a CD. A high-yield savings account at a federally insured institution is the default vehicle. The yield should beat or match inflation on short timeframes. Do not keep the emergency fund in a checking account — accessibility without friction leads to quiet erosion from non-emergencies.

## Build It Before Aggressively Paying Debt
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