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How Much Emergency Money Should a Family Have In 2022
How Much Emergency Money Should a Family Have In 2022
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Money Management

How Much Emergency Money Should a Family Have In 2022

Doreen Gathoni
January 18, 2022

Each family has its unique needs, wants, goals and challenges. Understandably, to consider and to get started on setting up a family emergency fund, it is key to define what an emergency fund is in relation to the family unit as follows:-

An emergency family fund refers to money set aside for your family to use in times of unplanned expenses or financial emergencies, such as major home repairs, death in the family, medical expenses, and increased costs of fixed expenses like rent. 

The rule of thumb according to financial experts is that it's a safe bet to aim to save three to six months’ worth of expenses in an emergency fund. 

This provides sufficient financial cover for all your necessary expenses like food, rent, utility bills, medical expenses, insurance, and/or loan payments.

Though the rule-of-thumb mentioned is effective, it may not be ideal for your family in specific situations. 

For example, if your family does not have a reliable source of income or is repaying hefty or numerous debts, which makes it difficult to save. 

This is why it’s important to always remember that no ‘right amount-for-all’ exists. So every family’s next step is to determine the right amount for their family’s emergency fund. 

Nevertheless, available options do exist to help you decide two key things:-

  1. What the ideal family emergency fund amount is, based on different factors including, your family’s overall financial situation and lifestyle
  2. Determining the nature of your family emergency fund, that is, either as a physical liquid asset like cash (and/or) non-physical liquid assets, like stocks and bonds 

Now that we’ve defined what and why a family emergency fund is important, let us dive into the ins and outs’ of how to build an emergency fund, what not to do, and what to do  

How To Build Your Emergency Fund 

  1. Set an emergency fund savings goal based on personal circumstances and risk factors, to help determine how many months to save up for. 

As an example, you could save the amount of 4 months expenses to fund your household emergency fund and save the amount of 2 months expenses to fund your travel emergency fund. 

  1. Before you calculate an exact amount, understand what expenses you should consider as priority / fixed expenses.

When calculating expenses only consider things you’ll still be required to pay for in the event of an emergency; for instance, you’re still required to pay rent even as you deal with an emergency

  1. To calculate, determine the total of your monthly financial obligations or expenses and multiply that total by the number of months you want to save. The total amount is the total amount for a fully-funded emergency account. 


  • Whether you choose to top-up your emergency funds or not, remember the rule of thumb. That is, aim to save up, to cover 3 - 6 months’ worth of expenses, and if you can, opt to save more
  • A Two-Step Emergency Fund is a very good “starter” option if you’re in debt / have debt. For instance, start saving Ksh. 500 as you pay- off your debt. Once you’re debt-free, only then, may you realistically go ahead with the 3 - 6 months’ plan shared above to contribute more to your family emergency fund   

NB: Whether it takes weeks, months, or years to pay off your debts, don’t wait on getting started on your emergency fund

  • Emergency fund calculators are a free, reliable, and recommended online tool to help calculate your emergency fund, by factoring in real-life circumstances, for example, your industry/field
  1. Activate the digital options available to automate the different ways to get real-time updates, to deposit and access your emergency fund around the clock’ from anywhere
  1. Consider channeling all or part of additional income from sources other than your regular ones to your family emergency fund. This could quickly get you closer to your target.  For instance, if you get extra income / additional cash other than from your usual income source(s); set some of it or all of it into your emergency fund 

Once you successfully build or create your family emergency fund, aim to nurture and protect it. Let's get into what not to do and what to do when it comes to your family’s emergency fund.

What Not To Do

  1. Avoid the temptation to assume that certain situations can’t happen to you, which is an assumption that is often proven untrue by the fact that in life, everyone can and will have to deal with emergencies. Instead, opt for a more prudent approach - which is to plan based on when an emergency will happen, not on, whether it will happen
  1. Do not procrastinate. Remember setting a goal doesn’t mean much if you don’t have a plan that has a timeline or timelines.


If you have financial obligations to others, set aside a separate emergency fund from your family emergency fund, where possible.

What To Do

  1. Three key things to remember about any emergency savings fund are:-
  • It's an ongoing process (just like a retirement savings account or any savings account) 
  • Only you can decide the right amount, especially when the recommended saving amount is a bit of a stretch for you.
  • Its purpose is to protect you from worst-case scenarios too. For instance, in the case of sudden major illness, job loss, home repairs, or car breakdown/repairs. 
  1. Identify and understand your monthly financial obligations - for example, insurance, utility bills, rent, transportation costs, and other expenses you don’t want to fall behind on.
  1. Opt to get more in return by setting up your emergency fund in a high-yield savings account, to increase your efforts, even when you might not be able to contribute to the emergency fund. 


Don’t combine your emergency fund with your current account or savings account, to avoid dipping into your family emergency fund, especially when you use a debit / ATM card 

Bottom Line: Get Ready For Life’s “Maybe’s”. It Pays To Save Smart

Working slowly towards your goals is okay, even admirable, as long as you stay motivated to attain your goal. 

You could start by setting aside small amounts on a regular basis – maybe every week, every 2 weeks, or every paycheck? You choose and remember saving something is better than saving nothing.  

Gathoni is a skilled content developer with over 5 years of experience in content development as a graphic design and copywriter, in different industry sectors. Her passion to nurture positive, stronger, communication impact continues. You can find her on LinkedIn here.

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