How much should I have in an emergency fund?

Concerns & risks

Your car broke down, and the repair bill landed right when rent was due. You put it on a credit card and swore you'd build an emergency fund, but how much is enough?

Without a buffer, one surprise bill can land on a credit card.

Causes & evidence

There isn't one magic number. Start small, then build toward a few months of basic expenses. See emergency fund.

What to do

1. First goal: a small starter cushion for things like a car repair.
2. Add up rent, food, utilities and transport for one month.
3. Set an automatic transfer every payday.
4. Keep it in a separate savings account.

Common mistakes: Common mistakes: aiming for a huge number right away and giving up. Start with a small starter goal, then build toward several months of essential expenses over time. Count only must-pay costs like rent, food, utilities, insurance and minimum debt payments. Another mistake is dipping into the fund for non-emergencies like sales or vacations. Keep a separate savings goal for those. If you use the fund, refill it before moving to other goals.

Speed Man tip: Name the account 'DO NOT TOUCH'. It works more than you'd think.

Wrap-up: Start small, then build toward months of expenses. Automate savings. Keep it separate and insured.