Emergency Fund Calculator for Irregular Income

Set an emergency fund target for irregular income from your own lean months.

An emergency fund for a variable income has two jobs: cover the months when little comes in, and cover a longer gap such as a lost client or illness. Enter your last 12 months of take-home income and your essential monthly costs to see a target based on your own lean months, how far you are from it and how long it takes to get there.

Take-home income for each of the last 12 monthsAfter tax, one number per line or separated by commas3200, 4100, 1500, 5200, 2800, 900, 4600, 3900, 2100, 6100, 3300, 2400 Essential costs per monthRent, food, utilities, insurance, minimum debt payments Months of essential costs to holdFor the longer gap you want to survive Emergency savings you already have Amount you can save per month

The target here is the larger of two numbers: your chosen months of essential costs, and the deepest run of shortfalls in your last 12 months (the most your essential costs exceeded income over consecutive months). Past income does not predict the next year; if one client makes up most of your income, consider a larger target.

How the target is set

A fixed rule such as "three to six months of expenses" assumes a salary that stops only if you lose your job. With irregular income, money runs short every year in the lean months, even when the annual total is healthy. The calculator looks at your own last 12 months, finds the longest stretch where essential costs exceeded what came in and adds up that shortfall. If that number is larger than the months of cover you chose, it becomes the target, because you have already needed that much once.

Our guide to emergency funds for an irregular income works through a full cash calendar for a freelancer, and the cash runway calculator does the same job for a business account.

Questions

How many months of expenses should a freelancer save?

Enough to cover both your normal lean months and a real interruption. Start from the months of essential costs it would take to replace your largest client, then check it against the shortfall history the calculator shows.

Should tax money count as emergency savings?

No. Money set aside for a tax bill is already spent. Keep it in a separate account and leave it out of the savings figure above.

Where should an emergency fund be kept?

Somewhere you can reach within days without selling investments at a bad moment, and where the balance does not move with markets. Check how quickly you can withdraw and whether the account is protected by a deposit guarantee scheme.