A 3-month emergency fund when you spend ₹30,000 a month
An emergency fund is measured in months of your own spending, not in round numbers. At ₹30,000 a month — rent or EMI, groceries, bills, school fees, premiums, the lot — 3 months means ₹90,000 sitting somewhere you can reach in a day. It is the only money in your plan whose job is to earn nothing and be boring.
- Target
- ₹90,000
- Save for 12 months
- ₹7,500/mo
- Save for 24 months
- ₹3,750/mo
- Where to keep it
- Sweep FD
3 months of spending
to get there in a year
the gentler route
or a liquid fund
How fast you want it
| Timeline | Monthly saving | Fund after 6 months | Fund after 12 months |
|---|---|---|---|
| 6 months | ₹15,000 | ₹90,000 | ₹90,000 |
| 12 months | ₹7,500 | ₹45,000 | ₹90,000 |
| 18 months | ₹5,000 | ₹30,000 | ₹60,000 |
| 24 months | ₹3,750 | ₹22,500 | ₹45,000 |
What 3 months actually covers
| Situation | Typical gap | Covered by ₹90,000? |
|---|---|---|
| Job loss, one earner | 3-6 months of search | Partly — stretch to 6 months if you are the only earner |
| Hospitalisation excess and travel | 1-2 months of spending | Yes |
| A major home or car repair | Under a month | Yes |
| Business or freelance dry spell | 6-12 months | No |
Why 3 months and not a round lakh
A ₹5 lakh fund is generous for a household spending ₹40,000 a month and thin for one spending ₹1.5 lakh. Sizing it against your own outflow is the only version that means anything. Count everything that does not stop when income does: EMIs, rent, groceries, utilities, school fees, insurance premiums and medicines.
Where it should sit
Split it. Keep about a month in a savings account for same-day access, and the rest in a sweep-in fixed deposit or a liquid fund — both reachable within a day, both earning more than a savings account. What it must not be: equity, a locked FD with a heavy penalty, or money already earmarked for something else.
The rule that keeps it intact
Decide in advance what counts as an emergency, and write it down. A medical bill or a lost job qualifies. A wedding you have known about for a year, a phone upgrade and a holiday do not — those are goals, and goals get their own savings. Once you spend from the fund, refilling it becomes the next month's first priority.
Where FamTally comes in
FamTally already knows what you spend, so it sizes this target for you rather than asking you to guess — and tracks the balance against it every month. Set it as a goal and the app shows the projected month you hit ₹90,000, adjusts when your spending changes, and warns you when a planned expense would eat into it. Free to use.
Stop doing this in a spreadsheet
FamTally keeps your loans, income, expenses, assets, insurance and goals in one place, forecasts five years ahead, and answers questions about your own numbers. Free, and built for Indian families.
Start freeQuestions people ask
How big should my emergency fund be?
3 months of spending. At ₹30,000 a month that is ₹90,000. Single-income households and freelancers should aim for the longer end.
How long will it take to build?
Saving ₹7,500 a month gets you there in a year; ₹3,750 a month takes two. Starting small beats waiting for a lump sum.
Should the emergency fund be invested?
No. Its job is to be available on a bad day, not to grow. A sweep-in FD or a liquid fund is the right home; equity is not.
Does an insurance policy replace it?
No. Health insurance pays the hospital, often after you have already paid and claimed. The emergency fund covers the gap, the exclusions, and the fact that income can stop for reasons no policy covers.