How Much Emergency Fund Do You Need?
📅 2026.01.30⏱️ 12 minFinance Basics
📌 Key Points
- ✅ Basic: Monthly expenses × 3-6 months
- ✅ Freelancer: 6-12 months recommended
- ✅ Keep in accessible savings account
- ✅ Separate from investment funds
1. What is an Emergency Fund?
An emergency fund is readily available cash for unexpected situations like job loss, illness, accidents, or urgent repairs. Its purpose is safety and liquidity, not investment returns.
Have Emergency Fund
37%
Korean adults
Recommended
3-6mo
of expenses
2. Calculate Your Emergency Fund
Step 1: Monthly Essential Expenses
| Item | Example |
|---|---|
| Housing | 800K |
| Food | 400K |
| Transportation | 150K |
| Utilities | 150K |
| Insurance | 200K |
| Total | 1700K |
Step 2: Determine Months
3 months
- • Stable employment
- • Dual income household
- • No dependents
6 months
- • Single income household
- • Job change possible
- • Have dependents
9-12 months
- • Freelancer/Self-employed
- • Irregular income
- • Health concerns
Example
1700K × 6mo = 1,0200K
💡 Check your take-home pay
Salary Calculator →3. Saving Strategies
3.1 Automatic Transfers
Set up automatic transfers the day after payday. Transfer 20% of income to your emergency fund.
3.2 Milestone Goals
1 month - Minimum safety net
3 months - Basic goal
6 months - Stable
12 months - Full protection
4. Where to Keep It
| Method | Pros | Cons | Rating |
|---|---|---|---|
| Parking Account | Instant, interest | Low rate | ⭐⭐⭐⭐⭐ |
| CMA Account | Higher rate | Need brokerage | ⭐⭐⭐⭐ |
| Term Deposit | Safe, fixed rate | Early withdrawal penalty | ⭐⭐⭐ |
⚠️ Don't put emergency funds in stocks or crypto! Value can drop when you need it most.
5. Emergency Fund vs Investment
Prioritize savings over investment until you reach your emergency fund goal. Without it, you may have to sell investments at a loss during emergencies.
Recommended Order:
- Save 1 month emergency fund
- Pay off high-interest debt
- Expand to 3-6 months
- Start investing (pension, ETF)
💡 Simulate investment returns
Compound Calculator →