How Much Cash Should You Keep? The 6-Month Emergency Fund Rule

The 6-month rule is a simple way to protect yourself from layoffs and income shocks. Here's how to size the cash buffer that actually keeps you safe.

Know exactly how much cash you need for a true safety net.

The rule in one line

Multiply your essential monthly expenses by six. That's the cash buffer most households need for a layoff or medical surprise.

Include rent, utilities, groceries, insurance, and minimum debt payments. Skip discretionary spending like travel or dining out.

Freelancers or single-income households may want 9-12 months. Dual-income households with stable jobs might keep 3-4 months.

Financial engineer and founder of QuantCurb. Former fintech data scientist building institutional-grade calculators for everyday wealth decisions.