How Much Do You Have in Your Emergency Fund?

Current times have started getting me thinking, just how much of an emergency fund is enough?

I'm curious to know, how many months of cash do you have deliberately set aside in your emergency fund? (in terms of months worth of living expenses)

Poll Options

  • 131
  • 27
    Less than 1 month of living expenses
  • 38
    1 month of living expenses
  • 28
    2 months of living expenses
  • 113
    3 months of living expenses
  • 18
    4 months of living expenses
  • 8
    5 months of living expenses
  • 105
    6 months of living expenses
  • 26
    9 months of living expenses
  • 672
    12 months of living expenses


  • 12 months + in cash equivalent funds

    • That's great! Do you keep the entire amount in cash, or is part of it invested elsewhere?

      • Investments and bullion as well. Fast to liquidate.

        • Investments isn’t an emergency fund. Market drops 30%, 3 weeks later you lose your job. Suddenly your 3 month fund is looking like 8 weeks - no mater how fast you can liquidate it.
          Gotta always assume that you need your emergency fund at the worst time when everyone else will need it / most inconvenient time.

          • @Saywhaaaaat: I think most people here are misunderstanding the difference which is why the poll looks the way it does. The majority of people having 12 months worth of emergency funds over the top of investments and general savings is a joke.

            I have savings that I could spend on whatever I wanted, and that's 12 months of living expenses., and similar amounts in investments. But an emergency fund should essentially be an untouchable cash amount that you only use when things are dire, and that amount is much smaller.

          • @Saywhaaaaat: Yep and you also can't account for when your funds are locked up (e.g trading halts).

          • @Saywhaaaaat: That isn't necessarily true. It's simpler to think of funds as simply 'funds' and the label or tag on it doesn't change that.

            It's possible (but much less likely) that if you had those funds in actual cash and the currency was devalued that suddenly your 'emergency funds' are worth 50% less than you thought and any investments aren't devalued (or are possibly revalued higher!) in comparison.

            The key is what dasher86 said - they have investments and bullion which implies they have diversified their emergency fund(s).

            I'd suggest most people thinking about this simply think about money in a bank account - which can also be labelled as an 'investment' if it was in a term deposit (which could be broken if needed while only losing access to the 'return' component if you just needed the cash)

            • @jason andrade: @jason andrade it may be simpler but its also wrong, when in the history of the world has this every happened at the same time?

              the currency was devalued that suddenly your 'emergency funds' are worth 50% less than you thought and any investments aren't devalued (or are possibly revalued higher!) in comparison.

              making things simple doesn't make sense when you are also trying to rationally plan for the end of the world .. what if the banks go bankrupt and are allowed to take everything from your account > 250k(I think this all thats guaranteed by gov) and even then they have no obligation to actually let you withdraw money in a timely fashion .. if there is a run on the bank there is no telling when you are going to see your money. Or the broker who has your investment goes bust or gets hacked by foreign national interests and looses all your trades .. its all 1s & 0s now .. its all possible.

            • @jason andrade: ‘Cash’, as boring as it is, is the best emergency fund. You can stick it in an offset so at least you’re getting some return for your money (if you have a mortgage). But anything else really isn’t an emergency fund.
              Money Smart, for a government web site, is a surprisingly great source of common sense most people should spend some time to read…

            • @jason andrade: How about a bank like Up Bank? They offer a better rate than a term deposit and are covered by the government.

          • @Saywhaaaaat: Value of investments & speed of liquidity all depends on the type…. ;)

    • Is the cash at home? May I have your address please?

  • How "emergency" is the fund?
    I have savings and investments I would rather not use for living expenses, but if things got grim I would.

    I really struggled to have funds for an emergency when we were a young family with lots of expenses, reduced income and high housing costs. I kept a credit card with a high, unused balance then in case of emergency.

    Our family is older now and it is more manageable to have assets available for a rainy day.

    • I'm classing an emergency as an event that would halt your regular flow of income for a period of time IE loosing your job.

      • I guess if one of the adults in our house lost their job, we could tighten our belts and live off the other's income, albeit at a pretty modest lifestyle.
        If we both lost our incomes, I suppose 6 or 12 months depending on whether we tried to maintain usual day to day spending, or cut back (and cutting back drastically would be step one).

        It is a bit of a hard question. My grandparents grew up in the depression, and both of their families saw dramatically reduced incomes in the early 1930s. But their families shifted their expenses dramatically lower too.
        Their stories to me tended to emphasise the worst times, when no money came in one month or similar, but the reality was most of the time over a few years of very hard times, there were patches of income as a few days work was picked up, here and there, or something was sold that covered the most urgent bills. And they told stories about getting six pence to go to the Saturday movies sometimes too - so there was definitely enough money around for a treat from time to time.

        If you lost an income today, and kept your expenses at the same level, and failed to earn any replacement income at all, well, you would be living in denial.
        With the troubles going on now, we an already see mortgage and rent holidays. And I am sure if I was in dire straights the rates and water bills would be ignored, lifestyle expenses like gyms, netflix etc. would be cancelled and lots more pasta would be eaten. (have you noticed pasta sauce specials have disappeared?).

        I guess my message is a lot of financial advice about having 6 months income set aside is a bit misguided. The bulk of people can make a lot of savings in an emergency, and income doesn't necessarily go from 'normal' to zero. There is a lot of things in play to between normal and zero.

        So have some savings, as much as you can realistically put aside, but don't make it something you worry too much about.

      • Keep in mind we are on Ozbargain so I'm sure most of us could get by much easier than others being more frugal. I've got exactly 1 years worth of funds if no money is coming in. Wasn't always like that though. Sometimes less, sometimes more but usually less lol. Most people I know it's split 50/50. Either they have nothing extra or they have quite a bit saved (at least 50K) I seem to be the only one near the middle. I have no debt where everyone else I know does have it. Mortgages, car repayments etc. So maybe I'm the only that's actually in the positive when it's all said and done?

        • $25k for a year? Do you not pay rent?

          • @brendanm: I didn't say $25K I said somewhere near the middle. Rent is about $300-$350 a week in Adelaide (2/3 bed with ensuite). So that puts it around 17. Then bills and food etc. $30K is plenty living low! Obviously living in Sydney or Melbourne metro is going to be much more. But people would obviously move further out if they didn't have the money… Otherwise I don't why you're using this site!

          • @brendanm: I live for under 20k per year. Renting in a share house is very affordable in regional Victoria. I was paying 100 per week to my mate who owns the house (5 years old) and we split bills down the middle. I consider myself very frugal and tight with money but that doesn't prevent me from doing or purchasing certain things. I just really question whether things are worth the asking price and whether I will really use them.

            • @Mr Haj: regional sounds nice, unfortunately as a student costs are much higher, we're usually forced to live in urban areas in order to attend, even with classes online the dreaded time when they force us back into classes could come at any time which wouldn't align with a lease, so we typically have rents of 130-170 a week in share houses(some even higher)

    • Emergency fund should be cash.

      Investments need to be sold under duress if you rely on them for emergencies, you could lose a lot doing this.

      Credit card unused balance can be removed by your bank at any moment, and that moment is very likely to coincide with a dramatic reduction in your income.

  • I always keep $2000 at all times in my savings account.

  • Have enough to survive 12 months of $0 income in my bank's savings account. I always like to plan worst-case-scenarios.
    Sometimes I dip into it if needed, but always keep it balanced over the long term.

    • While it would be nice to have that kinda money sitting in savings, surely it's poorly used capital? I mean, if you're getting a crummy interest amount which only covers CPI then it's dead money?

      • I look at it as an investment into my mental wellbeing :)
        I lost my job due to coronapanic and was unemployed for 1 month until I found my current temporary job. I really did not stress at all and enjoyed that month off like a holiday, while casually looking for jobs, because my emergency fund was in top shape. Still got 11 months left as this temp job is about to dry up.

        Meanwhile, I have friends who traveled multiple times per year who are now crying "it's the end of the world for me, I will starve if I stop working for 2 weeks!".
        I think it is 100% worth it. Investments be damned, I don't want to feel stressed.

  • My emergency fund aka credit card has about -6 months worth of living expenses, I can push it out to -8 months… so I have 2 months in my emergency fund

    • Thats not “your” funds. It’s the card issuer’s money, who would be charging you exorbitant interest on the balance

      • That could be said about offset and redraw facility on a mortgage. It is only an illusion of savings. It is just a lure for you to become more in debt. Would interesting to know how many people included their offset and redraw in their emergency fund calculations.

        • How is your own money in an offset account, offsetting interest on your home loan at a better rate than a savings account, not considered emergency funds? It's pretty accessible should it be required.

          • @9839002: I am stating that it is a loan, and you are overall in debt. Much better off than a credit card debt, but still a liability. I acknowledge that for people with significant equity, this argument will not hold.

            • @zealmax: Thank you.
              If you have enough in your offset, you can live off that and use it to pay off the mortgage in times of desperation. It's as good as savings, in my view. In fact, it's better than savings as the net benefit of saving you interest is tax free, as opposed to earning interest which is not.
              I'm not an accountant, but my situation is pretty comfortable and having money in the offset means if I lose my job or shit goes sideways, I can use that to see me through.

        • an offset account is the perfect place for your emergency fund to be sitting.

          There is almost no better place actually.

  • Anybody with sufficient funds to go above 'nothing' in the poll is well and truly above the low-middle income bracket, and presumably doesn't have ongoing experience with Centrelink (prior to JobSeeker).

    House ownership/investments/savings are all luxuries, as far as I'm concerned.

    • I think this is true, and probably half of Australians don't have good access to those luxuries.
      But people who have experience with a precarious income are also usually very realistic about things like signing up for an expensive car payment or other high fixed costs. When I was young and broke (as opposed to being poor, because I was lucky to have family I could have relied on in a pinch) my only fixed expense was rent. Everything else was possible to skimp on.
      A slice of bread with scraps from the vegetable crisper and a bit of melted cheese under the griller is a tasty dinner, the power bill can be very late before they cut you off - even longer if you call them and plead, and the beach or a picnic is a day out that costs next to nothing if you bring vegemite sandwiches and a thermos for instant coffee.

      I don't really understand how it changed so that occasionally we will get Indian take away and have no change from $70. It isn't 70 times better than that $1 pizza toast (it is better, though).

      I guess the COVID stuff has been a wake up call for people who have skated close to the wind, spending their incomes, who might be looking at their budgets for the first time. There is probably some good to come out of the whole disaster if it results in a bit of a reality check.

      With regard to Centrelink, I do think it is darkly amusing that at the first hint richer people might need to use welfare the payment doubled and things like work obligations disappeared…

      • House ownership/investments/savings are all luxuries, as far as I'm concerned.

        Given state of the country I would agree.

        When I was young and broke (as opposed to being poor, because I was lucky to have family I could have relied on in a pinch) my only fixed expense was rent. Everything else was possible to skimp on.

        Young people should experience this. Living poor for 6 months would really change life decisions. I family was flat broke, had to put all my clothes on and still got the cold in winter.

        I don't really understand how it changed so that occasionally we will get Indian take away and have no change from $70.

        Worst part is you need to get a second meal to make it feel like you had a full meal. $20 for a main in most capital cities and you only get a small flat rectangular box of food.

        I guess the COVID stuff has been a wake up call for people who have skated close to the wind, spending their incomes

        Australia's little biff with China looks like it will hit incomes. Even 10% reduction in national income would cause a lot of grief. People have no idea where their money is coming from. Temporary increase in incomes people seem to translate to permanent new normal.

      • I think things like having to scrape by eating pizza toast just to ensure your security is basically living on the boarder of poverty, we should not be striving or encouraging this to be the norm.

        • the unfortunate thing is that for many scraping to have pizza toast some days of the week and just not eating the other days is a reality for a lot of people.

      • looking at their budgets for the first time.

        Look, I agree, but didn't we say the same of the GFC? A good chunk of us were around to learn from that.

        I "learned" 30 years prior to that, and it stuck. Seems the yo-yo-collective-amnesia is the rule for most.

      • Oh, libraries are currently one of? the only places you can spend a nice day without being expected to spend money.(and a lot of them are super nice too!)

    • Anybody with sufficient funds to go above 'nothing' in the poll is well and truly above the low-middle income bracket

      Nah. All depends how you spend your money and when you start. One could be on $200k but still have nothing after servicing that new BMW.

      • That just means they're rich and stupid. They've got sufficient funds, even if they don't save anything

        As I said, savings are a luxury that poor people simply can't indulge in. Even if it's a good idea.

        • savings are a luxury that poor people simply can't indulge in.

          Many (not all ofcourse) also call themselves or make themselves poorer than they really could be, without resorting to extreme examples like a BMW or unaffordable mortgage.
          Like on the media recently was a sob story of the single Mum who couldn't afford enough internet for her kids to learn at home reliably - never mind the expensive phone, Netflix subscription, and whatever else.

          • @dufflover: I agree you can also get poor & stupid people too

            However, by your own example, making wise choices to swap Netflix & expensive phone plans for an NBN subscription is not going to provide more income to create a viable savings plan. Same as sacrificing to buy a house; you're trading necessities around but that's not additional income.

            Savings SHOUDN'T be a luxury item, but in reality it really is.

            • @Switchblade88:

              making wise choices to swap Netflix & expensive phone plans for an NBN subscription is not going to provide more income to create a viable savings plan

              It can though. It won't provide 'more income', you're not earning more money, but it'll help move money around and it'll increase your available money/savings. If you can't earn extra money to increase savings, then you need to cut cost.

              Being able to and willing to think outside the box of what you can achieve and save is whats going to help you out of that little bubble.

              • @Ughhh: Smol injection here, as a poor person you often(whether you use it or not) are required to have a phone subscription. and they usually cost $30 a month. And then the mother would need the $90 a month internet subscription for the kids education. and $120 for something that you wont use more than $90 for can be devastating to a very low budget.

                • @sarahlump: If youre that poor, you don't need the newest iPhone. There are plenty of cheap prepaid phones <$100.

                  and they usually cost $30 a month.

                  You're not looking hard enough then. Can get plans at least 1/2 that price with decent data. As I said, if you can't earn more money to increase income, then you need to look at ways to cut cost, dont convince yourself with excuses. $90 a month also sounds like a top tear nbn plan, is Netflix part of education?

                  • @Ughhh: gosh, erm, it turns out that japans navy in the past learned that if you spare expense and eat only cheap white rice you'll die. People aren't robots dear.

                    • @sarahlump: Not doing anything to improve your situation sounds more like a robotic move to me.

                      Keep making excuses for yourself if you like, no doubt it'll always be someone else fault for your misery.

          • @dufflover:

            Like on the media recently was a sob story of the single Mum

            Oh wow, mate - that ACA story really does sound informative to the majority of people's plight in Australia. Totally fair and balanced.

        • This simply isn’t true. Not in Australia, at least. I know several people that have managed to build savings relying entirely on government payments. And we’re not talking COVID-19 payments, but the $200/week ones. It wasn’t easy and they were boarding with other people to bring down rent costs, but they managed to do so.

          By your example, I’d say that home internet is a luxury. Trust me, I know how essential internet can be but unless your job depends on your having internet, then I’d definitely do without it in preference to not having any savings at all.

      • You can be in the low-middle income bracket and have savings. As I previously said, it depends how you spend your money and when you start.

        I know a number of people in minimum wage and has worked their ass off and made sacrifices to purchase a home.

    • what? When i was uni and on youth allowance (was about 500 a fortnight back then) for a few years i went from negative to a few thousand in savings just off the youth allowance. This was living away from home and with poor parents too btw (I actually lent them money when i was on centrelink lol). The key is I cut standard of living by house sharing, meal sharing, didn't live in the city, etc.

      An emergency is really the only reason not to be saving up a buffer, other than lifestyle choices like city living, kids, or if you just can't get centrelink for some reason.

    • Not necessarily. I earn a bit less than $40k/yr before tax. Haven't needed to be on centrelink in about 10yrs. No kids, and I'm obsessively careful with my budget.
      Over the past year I've built up an emergency fund of a bit over 2 months of expenses on top of my basic savings. It'll go further if I ignore anything but unavoidable bills & groceries. And I've done that while using Raiz & Spaceship to invest. You don't have to be rich or earning over $100k, you just need to live within your income.
      Of course, if your income isn't high enough to afford even a basic life on, you won't be able to save no matter how carefully you budget.

    • Anybody with any income at all should have an emergency fund.

      A bad time to have no money is now, but a far worse time is during an emergency!

      Live off bread and water if you have to (while you build it up) but you gotta have something stashed away for emergencies.

  • $600,000, or about 3 months of living expenses, G.

    But seriously, I live everyday like it's an emergency.

  • We have always budgeted to ensure our mortgage payments could be covered and we could live (very basically) off either of the two incomes in our household. Managed to build up our offset account a fair bit over the last few years, so could get by for a couple of years with no income if we had to. We're temporarily reduced to one income at the moment due to a redundancy, so it makes things a lot less stressful having it there.

  • Anyone wondering how they will blow their money in their old age now that travel isn't as attractive? I might check off a shortish bucket list, but I think my future travel ambitions have shrunk dramatically. Not so much out of fear of the virus, but more that the world is becoming a less attractive place to visit. For example, if you know the Eiffel Tower from Serge Gainsbourg fame, would you really want to see it now with an anti-terrorism screen surrounding it.

    Anyhow…less travel is found money!

    • I know what you mean. I am still too far away from retirement, but it has made me realise a good chunk of the things I was looking forward to could be off the table.
      I think that it is worth remembering people are very adaptable. One of my grandparents lived on nothing but the old age pension, never travelled abroad, and had an extremely modest budget. But she had a fantastic quality of life for 30 years of retirement as she enjoyed friendships, family, simple activities and a strong connection to her community - none of which required much in the way of money.
      There is plenty going on to build a rewarding life without boating around the Med, or similar. Not to say boating around the Med wouldn't be lovely! But I have seen research that shows as you age expenses shrink, with no corresponding decrease in life satisfaction.
      Because we are assaulted with marketing about spending money, that tends to be front of mind in what is rewarding, but there is plenty of options that don't have a marketing budget that are pretty good.

    • Not travelling is saving me heaps.

      I feel sorry for those who may not get chance to travel for a few years.

  • Two super withdrawals. More than enough to survive on indo mie.

  • I have at least 12 months right now (not including investments which can be liquidated in case I need extra cash). Did a quick calculation and this will cover my rent and annual budget, with a bit left over for a cheap overseas holiday (a few grand).

    Generally 3-6 months is recommended.

  • I have my "emergency fund" sitting in my offset, it will help me survive for a while if I don't change my current spending habits.

  • I have 4 bog rolls and a few packs of Pasta…

    Living the dream.

  • 23,000

  • This poll is such complete bs/people not taking it serious.

    I think the goal is usually 3 months for most people, and can be extended further depending on circumstances (e.g., wanting to start a family you'd probably want to bolster it a bit). Most people will struggle to have 3 months (in a true emergency type account, not just general savings).

    12 months is pretty damn conservative to the point of being wasteful as you could be using that money more actively in investments.

    • Not everyone wants to or is savvy enough to actively invest funds. It's not uncommon to have years of savings sitting in bank accounts years on end even though barely accumulate any interest and actually depreciating from inflation.

      Even with that in mind, the ROI is generally not worthwhile to tie up funds somewhere with potential risk and would rather it stayed as liquid cash. Just in case…

      • I second this and I am on this boat. I have no interest in investing in stocks or any other things as its too volatile. I am happy to keep the money sitting in my savings account knowing that it is accumulating whatever interest and I can access it if/when I need it.

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