Investboard …
Calculator · Retirement
How much financial cushion do you need?
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The calculator turns your monthly expenses into an emergency-fund target and shows how long the build-up takes at your savings rate and your interest rate, in the currency you choose.
Set the target once and follow its progress.
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A widespread rule of thumb from consumer guidance is three to six months of expenses. What counts is what you actually spend, not what you earn. If you spend 2,200 a month, the target sits somewhere between 6,600 (three months) and 13,200 (six months), in whatever currency you live in.
Where you land depends on how exposed your income is. The calculator offers four buffer lengths, with this orientation:
| Buffer | Typical situation | Reason |
|---|---|---|
| 3 months | Permanent job, no children | A stable income with few people depending on it |
| 6 months | Most households | The common middle of the rule of thumb |
| 9 months | Self-employed, variable income | Income fluctuates and gaps between contracts can last longer |
| 12 months | Sole earner with a family | One outage affects the whole household |
Target = monthly expenses × buffer months (3, 6, 9 or 12)
For the timeline, the calculator takes your existing reserve, adds interest each month, adds your monthly savings and repeats until the target is reached. It then shows the target date and how much of the final amount came from interest.
Choose your money with Currency. The math is the same in every currency; nothing is converted.
Interest plays a small part in an emergency fund, but the calculator includes it so the timeline is not overstated. Enter what your bank or fund pays in Interest rate (% a year). Once you type a rate, the calculation uses yours.
With EUR, the field starts with an illustrative rate for the place you choose to hold the money: 2.5% for instant-access savings, 3.2% for a money market fund and 3.5% for a fixed-term deposit ladder. These are model assumptions to start from, not quotes: actual rates follow the market and differ between providers. No example rates are stated for other currencies: there, the calculation uses only the rate you enter, and a page that starts in another currency shows 0%.
Introductory rates are often limited in time. For an emergency fund the rate is secondary anyway: availability and stability matter more than the last decimal of interest.
An emergency fund has two jobs: it must be available when needed and stable in value. Instant-access savings meet both most directly: the money can be reached quickly and the nominal amount does not fluctuate.
The calculator also names an illustrative place to hold the money, based on how long the build-up takes: instant-access savings for up to 6 months, a money market fund for up to 36 months and a fixed-term deposit ladder beyond that. Each has a trade-off. A money market fund's value can fluctuate and access depends on trading and settlement. A fixed-term deposit ties money up until each rung matures. The suggestion describes options; it does not recommend a product.
In the EU, statutory deposit protection covers balances up to EUR 100,000 per bank and customer. Other countries have their own schemes and limits; check which one applies to your account.
A portfolio of shares is the wrong place for this money: whoever has to sell in an emergency may be selling in the middle of a downturn, turning a cash need into a realized loss.
Interest is calculated before tax; tax on interest income is not modeled. The figures are nominal, without inflation: the target is based on today's expenses. If your expenses rise, the target rises with them, so it is worth recalculating from time to time.
The emergency fund is not an investment; it is the condition for one. With the buffer in place, long-term investments do not have to be sold for the first car repair or a back-payment of utility costs. More on the reasoning is in Building an emergency fund: how much, where to keep it, how fast?
A widespread rule of thumb is 3 to 6 months of expenses. The calculator offers 3, 6, 9 and 12 months; its guidance names the longer buffers for variable income, self-employment or a sole earner with a family. The target is monthly expenses times the months you choose.
The rate you enter under Interest rate (% a year). With EUR the field starts with an illustrative rate for the place you choose (2.5% instant-access savings, 3.2% money market fund, 3.5% fixed-term deposit ladder); these are model assumptions, not quotes. In other currencies only the rate you enter is used.
It should be available when needed and stable in value. Instant-access savings meet both most directly. The calculator also names an illustrative option by build-up period: instant-access savings up to 6 months, a money market fund up to 36 months and a fixed-term deposit ladder beyond that. Each has trade-offs in access and value.
Yes. The emergency fund is part of your total wealth, but it is usually held separately from long-term investments so that they do not have to be sold in an emergency.
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Inputs
Buffer months
Standard: common for most households
What your bank or fund pays.
Your emergency-fund goal
Target amount
USD 15,000.006× monthly expenses (USD 2,500.00)
Funds are tied up for a fixed term. Compare the actual interest rate, maturity and early-access conditions.