What should be the ideal amount for my Emergency Fund?
The ideal is to set aside the equivalent of 6 to 12 months of the household's fixed expenses. It's the reserve that avoids turning to credit when something unexpected hits.
In this guide
How much to hold
The benchmark is to set aside the equivalent of 6 to 12 months of the household's fixed expenses. It works as a safety cushion for the unexpected, without having to turn to credit.
How to work out yours
Start from your monthly fixed expenses and multiply. The less stable your income, the closer to 12 months it's worth holding.
Why it matters before a loan
An emergency fund protects your payments in cases of lost income or unexpected costs. It's what stops a bad month from becoming a credit problem.
Worked example
For fixed expenses of €1,200/month (example figures), the emergency fund should sit between €7,200 (6 months) and €14,400 (12 months), depending on the level of security you want.
Sources
Susana Vasconcelos
- Intermediária de crédito autorizada pelo Banco de Portugal n.º 0008496
- Mais de 10 anos na banca