1. What is an Emergency Fund?

An emergency fund is a financial safety net designed to cover unexpected expenses or financial emergencies. In the Philippines, financial experts recommend saving 3-6 months worth of living expenses.

2. How Does the Calculator Work?

The calculator uses a simple formula:

Where:

• Monthly Expenses — Your total monthly living costs in PHP
• Number of Months — Typically 3-6 months coverage

Explanation: This calculation gives you the minimum amount you should have saved for emergencies.

3. Importance of Emergency Fund

Details: An emergency fund provides financial security against job loss, medical emergencies, or unexpected expenses without needing to borrow money.

4. Using the Calculator

Tips: Enter your actual monthly expenses in PHP and select whether you want to calculate for 3 or 6 months coverage. Be honest about your expenses for accurate results.

5. Frequently Asked Questions (FAQ)

Q1: Why 3-6 months coverage?
A: This range provides enough buffer for most financial emergencies while being achievable for most people.

Q2: Where should I keep my emergency fund?
A: In liquid, low-risk accounts like savings accounts or money market funds that can be accessed quickly.

Q3: Should I include rent/mortgage in expenses?
A: Yes, include all essential living expenses - housing, food, utilities, transportation, etc.

Q4: What if I can't save this much?
A: Start small. Even 1 month's expenses is better than nothing. Build up gradually.

Q5: When should I use my emergency fund?
A: Only for genuine emergencies - unexpected job loss, major medical expenses, essential home/car repairs.