RightFiguresSavings divided by one month of expenses
Enter the essential expenses for one month, the savings you have now, and how many months you want that savings to cover. The page divides savings by the monthly expenses and compares the dollars with the target you chose.
Coverage is rounded half up to two decimal places. The dollar target is the monthly expenses times the whole number of months you entered. The shortfall or surplus uses those cents. Do not multiply the rounded month count by the expenses and expect it to match the dollar comparison.
A month count is not a recommendation. The Consumer Financial Protection Bureau’s emergency-fund guide describes cash set aside for unplanned expenses and says how much to keep depends on your situation. It does not define this division, and it does not require three or six months. People often compare those two choices. This page will use any whole number from 0 to 60.
This is not the debt-to-income calculator. That page divides debt payments by income. It does not measure months of expenses.
$10,000 of savings and $2,500 of expenses
$10,000.00 of savings and $2,500.00 of monthly expenses cover 4.00 months. A 6-month target is $15,000.00, so the savings are $5,000.00 short.
$18,000.00 with the same expenses covers 7.20 months and is $3,000.00 above that 6-month target. $15,000.00 matches it. $0.00 of savings covers 0.00 months and is short the full target.
$11,990.00 of savings and $3,000.00 of expenses display 4.00 months, because 3.9966… rounds half up. A 4-month target is still $12,000.00, so the savings are $10.00 short. The rounded month count does not mean the target is met.
What this leaves out
Essential expenses are the single monthly amount you enter. The page does not split rent, food, insurance, or debt, and it does not subtract them from income. Expenses of $0.00 are rejected. There is no infinite coverage figure. A target of 0 months makes the dollar target $0.00, and any savings above that are a surplus.
Frequently asked questions
Does 4.00 months mean a 4-month target is met?
Only the dollar comparison answers that. The month count is rounded. Savings
can display 4.00 months and still be short of four times the monthly expenses.
What if I have no essential expenses?
Enter an amount from $0.01 to $100,000,000.00. The page will not divide by
zero or describe the savings as lasting forever.
Sources & review
- An essential guide to building an emergency fund — Consumer Financial Protection Bureau
Last reviewed: . The formula is reproduced above so you can check the math independently.
Educational estimate only. Months of coverage are not a recommendation for how much cash to hold.