After you’ve figured out your monthly spending — your needs, wants, and goals — the next step is making sure you're protected when life throws a curveball.
That’s where your emergency fund comes in.
What Is an Emergency Fund?
It’s a pot of cash set aside specifically for financial emergencies. Not new sofas or last-minute getaways — but the serious, unexpected stuff: (I would highlight the first section of this sentence - good point adds clarity)
• Boiler breakdowns
• Car issues
• Gaps in income
• Health problems
• Redundancy or downtime in trade
Think of it as a buffer between you and financial chaos.
How Much Should You Aim For?
There’s no one-size-fits-all answer — but here’s a good rule of thumb:
• Employed: Aim for 3–6 months of essential living costs
• Self-employed or variable income: Aim for 6–12 months to weather quieter periods
Start by working out your monthly “Needs” (mortgage/rent, bills, food, transport, etc.). Multiply that by the number of months you want to cover, and that’s your emergency fund target.
Example:
Essentials cost you £1,500/month
Employed: £4,500–£9,000 Self-employed: £9,000–£18,000
Sounds like a lot? Don’t panic, the key is to build it gradually, not overnight.
Automate It and Forget About It
As with all good savings habits, automation is your friend.
Set up a standing order to a separate savings account the day after payday — even if it’s just £50 or £100 a month. Over time, it builds.
You can even label the account “Emergency Fund” so you’re less tempted to dip into it.
Real Tips That Help Clients Build Emergency Funds
• Redirect any windfalls (tax refunds, bonuses, unexpected income) straight into the fund
• Cut or cancel unused subscriptions — divert that money instead.DOUBLE CHECK. ITS CANCELLED AND NOT JUST DELETED APPS! LIKE ME!
• Round-up banking apps (like Monzo or Starling) can sweep spare change into a savings pot
• Treat it like a non-negotiable bill — future you, will thank you
Need Help Figuring Out Your Target?
Not sure how many months to aim for? Or want a quick review of what your actual monthly needs are?
If you’re not sure where to start or would like, we can help you understand what’s best for your situation.
Contact us today to discuss a tailored financial plan for your future.
You can book your online free initial consultation HERE