How this works
This multiplies your monthly essential expenses by however many months of coverage you're targeting — commonly 3 to 6 months, sometimes more for less stable income — then subtracts what you've already saved to show the gap still to close.
Common questions
Why do recommendations range from 3 to 6 months?
It depends on job security and income stability — a stable dual-income household might be fine with 3 months, while freelance or single-income households, or those in less stable industries, are often advised to hold 6 months or more.
Should my emergency fund include all expenses or just essentials?
Just essentials — rent/mortgage, utilities, groceries, insurance, minimum debt payments — the things you'd still need to pay if income stopped. Discretionary spending isn't usually included since that's exactly what you'd cut first in an emergency.