Emergency fund: how much to set aside and where to keep it

A broken washing machine, a car repair, a loss of income. Unexpected expenses aren't a question of "if" but "when". The difference between an inconvenience and a debt spiral is one thing: a reserve. It's not a sexy topic — but it's the foundation without which no other financial step makes sense.

The short answer

• Target: 3–6 months of expenses (not income) in an account you can reach within a few days.
• First milestone: €1,000 — covers most common unexpected expenses.
• Where: a savings account or a short-term deposit. Not stocks, not crypto, not cash at home.
• The reserve isn't for a holiday or a great discount — it's for situations you don't get to choose.

How much exactly do you need

• Employee with a stable income: 3 months of expenses.
• Self-employed, fluctuating income or a single household income: 6 months of expenses.
• Calculate from expenses, not income: rent, food, utilities, installments, insurance. That's the amount you must cover if your income stops.

Where to keep the reserve

• Savings account — instant access, interest at least partly offsets inflation. Ideal for most of the reserve.
• Short-term deposit — slightly higher interest, money locked for months. Suitable for the part of the reserve beyond 3 months.
• Where not: investments (in a crisis they drop exactly when you need the reserve), cash at home (inflation + risk), the current account you pay from (you'll spend it).

Three steps for this week

• 1. Calculate your essential monthly expenses and multiply by three — that is your target.
• 2. Open a separate savings account — apart from your current account, so the reserve doesn't "disappear" into everyday spending.
• 3. Set up a standing order for payday — even €50 a month reaches the first milestone in a year and a half.

What does a reserve do to your finances?

In the Ferrata simulator you'll see how a reserve changes the course of unexpected events — and what happens when you don't have one. No registration, free.