What Is the 3-6-9 Rule for an Emergency Fund?

My 12 years as a licensed financial coach taught me the importance of contributing to an emergency fund. Whether your goals include eliminating debt, saving for your children’s college funds, or investing for retirement, building a sufficient emergency fund supports your financial future.

An emergency fund helps cover unexpected expenses when they occur. Paying for car repairs, medical bills, and other surprise obligations reduces the likelihood of missing payments or adding to your debt load.

Your first goal should be to save one month’s worth of take-home pay. Putting away a month of after-tax income lets you focus on building your savings while reaching other goals.

The following guidelines demonstrate the 3-6-9 rule for emergency funds.

3 Months

Three months of take-home pay is an effective emergency fund target if you:

• Are a renter

• Have no children or other dependents

• Earn a steady paycheck

• Have family and friends who could help financially if needed

6 Months

Consider saving 6 months of take-home pay if:

• Your household has two steady paychecks

• You have a stay-at-home spouse, children, or other dependents

• You have a mortgage

9 Months

You might want 9 months of income if you and/or your partner are self-employed or full-time contractors:

• An unexpected expense can significantly impact an unpredictable income.

• A bigger emergency fund protects against business slowdowns and surprise bills.

• Saving adequate income reduces the risk of needing to find a job.

Modifying Your Emergency Fund Goal

The 3-6-9 rule serves as only a guideline for saving in an emergency fund. Your unique needs and circumstances should determine how much you save for unexpected expenses.  

Changes in your emergency fund goal should align with your income and expenses. For instance, you might save more as your income increases, or put away less when your children move out and your mortgage is paid off. 

*This information is for educational purposes only.