How many months’ salary should you save?

How many months’ salary should you save?
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How many months’ salary should you save for emergencies? If you haven’t asked yourself this question yet, now might be the time. According to The Money Charity, 15 per cent of people in the UK have no savings at all, and 30 per cent have less than £1,500 in savings. 

This lack of savings goes against the popular advice that you should have an emergency fund. These funds are there for true financial emergencies, such as your car breaking down or you losing your job. The bigger your emergency fund, the more time you have to get back on your feet.

So exactly how many months’ salary should you save to keep yourself afloat during hard times? We’ve done the math for you.

What the experts say

The general consensus is that you should have three months worth of living expenses saved in an emergency fund, according to The Money Advice Service. To know what your expenses are, add up all your bills and essential monthly outgoings. This means things you can’t stop paying, such as your mortgage or your rent, your utilities and food. Optional expenses such as eating out or your gym membership are not considered essential living expenses unless you’re under a contract you can’t get out of.

Once you’ve added all those expenses, multiply the total by three. So, if your monthly outgoings come to £2,500, you should aim to have £7,500 in your emergency fund.

An easier way to do it is to simply save three months’ salary as a financial cushion. This should cover all your basic bills but also give you a bit of room to stretch in case of unexpected expenses.

Before you start saving

While having several months’ salary saved is a very important step, The Money Advice Service recommends looking into your debt before you build up your emergency fund. Debts that come with high interest rates, such as payday loans or credit card debt, will cost you more in the long run than you can save. If you are in arrears on your mortgage repayments, you should also catch up before you save three months’ salary.

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You can continue to pay loans with low interest rates (such as a car loan) while you’re saving up. 

How to save

If you can’t afford to put large amounts of money aside to build your emergency fund, start small. You can save when you’re on a low income by creating a budget and cutting down on your spending. You can also trick yourself into saving money or give up something (eating out, buying new clothes) for a few months and use that money to kickstart your emergency fund.

If you qualify for Working Tax Credit or are receiving Universal Credit, look into the government’s Help To Save scheme. This programme allows you to put between £1 and £50 into a special savings account every month. At the end of two years, you will receive a bonus of 50 per cent of the amount you saved. An additional bonus is added after you’ve been saving for four years.

So, for example, if you put the maximum of £50 into the account every month, you will have £1,200 after two years of savings. At this point, the government will add a bonus of £600 to your total. 

Help to Save is a great way to build a small emergency fund if you can’t afford to do it on your own.


While putting away three full months’ salary might sound difficult, all you have to do is get started. If you stick to your plan, you’ll soon have a fully funded emergency reserve for anything life might throw your way. 

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