How much should I have in my emergency fund?

Most financial experts recommend 3 to 6 months of essential living expenses in your emergency fund. If you have a stable job with a regular income, 3 months may be sufficient. If your income is variable (e.g. freelance, casual, or commission-based), aim for 6 to 12 months. In Australia, the average household spends around $3,500 per month on essentials, meaning a typical emergency fund target is between $10,500 and $21,000.

Where should I keep my emergency fund?

Keep your emergency fund in a high-interest savings account that allows instant access. Avoid term deposits or investments for your emergency fund, as you need to be able to access the money quickly. Many Australian banks offer bonus interest savings accounts with rates of 4.5–5.5% p.a., which is a good option. The key priorities are liquidity (instant access), safety (government-guaranteed deposits up to $250,000 per ADI), and earning some interest while it sits there.

What expenses should an emergency fund cover?

Your emergency fund should cover essential living expenses only — the costs you absolutely must pay to keep a roof over your head and food on the table. This includes rent or mortgage repayments, groceries, utilities (electricity, gas, water, internet), transport, insurance premiums, and minimum debt repayments. It should not include discretionary spending like entertainment, dining out, or subscriptions that you could cancel in an emergency.

Emergency Fund Calculator

Enter your monthly essential expenses to calculate your emergency fund target. See how much you need, your current shortfall, and a savings plan to build your safety net.

Last verified: 1 July 2025

How much emergency fund do I need in Australia?

Standard rule: 3-6 months of essential expenses. Three months suits dual-income households with stable employment; six months is safer for single-income, casual, freelance or commission-based earners. "Essential" means rent/mortgage, groceries, utilities, transport, insurance, and minimum debt repayments — not dining out or subscriptions. Source: ASIC MoneySmart.

Worked example. Essential expenses $4,000/month → 3-month target $12,000, 6-month target $24,000. Saving $500/month in a 5% high- interest savings account gets you to $12,000 in just under 23 months. Keep the fund in an instant-access high- interest savings account (4.5-5.5% p.a. typical in 2026) — not a term deposit or shares. Covered by the government guarantee up to $250,000 per ADI.

Rent / mortgage*

Your monthly rent or mortgage repayment.

Food / groceries*

Monthly spending on food and groceries.

Transport

Monthly transport costs including fuel, public transport, tolls, and registration.

Insurance

Monthly insurance costs (health, car, home/contents).

Utilities

Monthly utilities including electricity, gas, water, internet, and phone.

Other essential expenses

Any other essential monthly expenses (e.g. childcare, medication, minimum debt repayments).

Months of cover

3 months

Minimum recommended for stable income

6 months

Standard recommendation for most people

9 months

Recommended for variable or freelance income

12 months

Maximum safety net for high-risk situations

Current savings

How much you have already saved towards your emergency fund.

Months to reach goal

months

How many months you want to build your emergency fund over.

General information and estimates only — not financial, tax, or legal advice. Always verify with a licensed adviser or the ATO.

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Emergency Fund Calculator

How much emergency fund do I need in Australia?

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