This calculator works out three numbers: your emergency fund target, the gap between that target and what you have saved, and how many months of saving it will take to close the gap, counting the interest your savings account pays along the way.
How this emergency fund calculator works
Enter five things:
- Monthly essential expenses: what you must keep paying if your income stopped (housing, utilities, groceries, insurance, minimum debt payments, transportation to work, childcare)
- Months of coverage: 3, 6, 9 or 12
- Current emergency savings: what you already have set aside
- Monthly savings amount: what you can add each month
- Savings account rate: the annual interest rate on the account holding the fund
The calculator then shows:
- Your emergency fund target: monthly essential expenses multiplied by the months of coverage
- Remaining to save: the target minus your current savings
- Time to fully funded: the months until the balance reaches the target. Each month it adds interest on the balance, then your deposit
- Interest earned while saving: how much of the final balance came from interest rather than deposits
Leave out discretionary spending such as dining out, entertainment and subscriptions; those are the costs most people cut first when income stops. How many months fits your situation (one income or two, how stable the job is, whether you’re self-employed) is covered in how much emergency fund you need.
Worked example
With essential expenses of $3,500 a month and 6 months of coverage, the target is $21,000. With $2,000 already saved, $19,000 is left to save. At $500 a month with no interest, that takes 38 months. With interest added monthly at a 2.5% savings rate, the calculator shows the target reached about a month sooner.
Two levers shorten the timeline far more than the interest rate does: a larger monthly deposit, and lower essential expenses (which shrink the target itself). On a fund of a few thousand dollars, the difference between savings rates amounts to a small share of the total.
Reading your result
- “Already funded!” means your current savings cover the months you chose. Money beyond the target can go to other goals.
- “Add monthly savings” means there is a gap but no monthly deposit, so the fund never fills.
- A timeline of several years is common for a 6 to 12 month target. A smaller first milestone, such as one month of essential expenses, gives an earlier checkpoint, and a budget calculator can show where a larger monthly deposit could come from.
If the monthly amount is small because the budget is already stretched, living paycheque to paycheque covers ways to free up room. For any other target, such as a vacation or a down payment, the savings goal calculator runs the same month-by-month projection.
Where to keep the fund
Most people keep an emergency fund in a high-interest savings account, inside or outside a TFSA; the trade-offs between the two, and the places that suit an emergency fund less well, are covered in where to keep your emergency fund. For the rate to enter above, the savings account and HISA rate table lists current everyday and promotional rates.
Building the fund around debt and other goals
With high-interest debt as well, many people build a small starter fund first, pay down the debt, then build to the full target; that order is laid out on the emergency fund guide, and the debt payoff calculator shows how long the debt will take. When it comes to drawing on the fund, the useful test is whether the cost is unexpected, urgent and necessary; planned costs such as holiday gifts or annual insurance premiums fit better in a sinking fund.
More tools for planning a monthly budget are in the budgeting guides.
Related calculators
- Budget calculator: split take-home pay between needs, wants and savings
- Savings goal calculator: how long any savings target will take
- Debt payoff calculator: a timeline for paying off debt
- Salary calculator: your after-tax income
- Line of credit calculator: the cost of borrowing in an emergency instead
- Inflation calculator: how inflation changes what the fund covers