How much emergency fund do we need to have if we have this amount of income?

“Emergency Fund” is a very important fund for life because we have to have reserves for emergencies or unexpected events such as job losses, natural disasters, illnesses, and epidemics. How much emergency savings do you need to be safe? This time, ACU PAY has prepared an answer for you.

How much of an emergency fund should we have?

How to calculate the emergency fund starts from listing the expenditure in each month to see what expenses we are spending our money with in each month such as

Expenses on residence such as house rental, house installments, insurance premiums, and utility bills.
Personal expenses such as Food costs, travel fare, and phone bills.
Expenses on health such as monthly medical expenses, dental expenses, braces.
Insurance premiums such as automobile insurance, life insurance, health insurance.
Expenses on credit cards and other debts.
Usually, emergency funds are calculated mainly from monthly expenses. The calculation criteria are divided into two concepts: for salarymen and freelancers.

How much of the emergency fund is considered enough these days?

In general, many financial experts ask us to prepare emergency funds of approximately three to six times the cost or income per month. However, in today’s era, the factors that affect our financial stability are increasing, especially after the prolonged COVID-19 pandemic which dramatically affected the economy. The provision of emergency funds at 3-6 times of income may not be as sufficient as before.

Expenses (baht/month)	Emergency fund
Expenses (baht/month)	3 times	6 times	12 times
10,000	30,000	60,000	120,000
15,000	45,000	90,000	180,000
20,000	60,000	120,000	240,000
25,000	75,000	150,000	300,000
30,000	90,000	180,000	360,000
40,000	120,000	240,000	480,000
50,000	150,000	300,000	600,000

For salarymen or people with fixed income, it is recommended to prepare 3-6 times of basic emergency reserves. But if you want to feel safe, you may prepare 6-12 times which will make you feel more comfortable.

For example, if we have an expense of 15,000 baht per month, it would be better to keep the emergency savings at 45,000 – 90,000 baht, or 12 times at 180,000 baht.

For freelancers, merchants with uncertain incomes should also prepare emergency reserves of 6-12 times monthly or more than 12 times more. In the worst-case scenario, if we have a year of unemployment, this fund will keep our lives on track.

For example, if you have monthly expenses of 20,000 baht per month, you should have emergency savings of 120,000 – 240,000 baht or even more to be safer.

Aside from focusing on savings and investment for money growth, emergency funds are one of the most important factors that should not be overlooked. There is no fixed amount of emergency funds. Let’s calculate monthly expenses and consider how much money should be kept to keep ourselves out of trouble.