Emergency fund: how many months of essentials

An emergency fund covers the month an income stops or an essential cost appears out of nowhere. It isn't for goals with a date, and it isn't for bargains.

One test sorts it: would you have to borrow if this money weren't there? A job loss, a fridge that dies in January, an urgent dental treatment — yes, so the fund is for them. A summer holiday planned since spring has a date, so it gets its own savings goal. A discounted TV can simply wait. And the monthly kindergarten fee is already in the regular plan; the fund only steps in for it when an income stops.

Keeping the fund for true emergencies is what lets it be there on the bad day, instead of being quietly spent on a sale.

A cushion is measured in months of essential costs, not months of income. The reason is what actually happens when money stops coming in: you cut flexible spending the same week, while rent, kindergarten, groceries and debt payments carry on.

Sam's family spends 42,935 UAH a month on essentials, so three months of cover is 3 × 42,935 = 128,805 UAH. Measuring in income would give 3 × 56,000 = 168,000 — a bigger, scarier number that assumes you'd keep paying for delivery, taxis and eating out while out of work, which no one does.

The target is still large, and that's fine: it's a direction, not an entry ticket. Even the first 1,000 set aside makes the next surprise a little smaller.

When a household has two incomes that rarely stop together, the cushion needs to cover only the gap one lost salary leaves, not all the essentials. If a second income keeps coming, it already pays part of the bills.

If Sam's 31,000 stops while his wife's 25,000 continues, essentials of 42,935 leave a gap of 42,935 − 25,000 = 17,935 a month. Over a four-month job search that's 4 × 17,935 = 71,740 UAH. Size for the bigger of the two gaps (losing the larger salary), then multiply by how long a similar job takes to find.

One caveat: this assumes the two incomes are independent. If both could stop at once — a move, a company closing, a wartime shock — the gap method understates the need, and full essentials are the safer base.

Most costs ease when income dries up, but a few don't, and they belong in the cushion in full. For a sole proprietor (FOP) in Ukraine, the minimum social contribution (ЄСВ) is one of them: as of 2026 it's 1,902.34 UAH a month, due even in a month with no students at all.

So Dana's month without income still costs her personal essentials plus that contribution: 21,200 + 1,902.34 = 23,102.34 a month. A cushion of six months is 6 × 23,102.34 = 138,614.04 UAH. Leaving the ЄСВ out would understate the target by 6 × 1,902.34 = 11,414.04.

The lesson generalises: a tax charged as a percentage of income falls to zero when the income does, but a fixed, flat charge keeps coming. Put the fixed ones in the base.

Two things vary from household to household, so one rule can't fit everyone. First the base: a cushion is built on essential costs, not income, because flexible spending is cut the moment money stops. Second the number of months, which depends on how fragile the income is.

More months when there's one income, when it swings, when a replacement takes long to find, when children depend on it. Fewer when two stable salaries can cover each other, so a couple might start nearer three months and a lone FOP aim for six or more. Ukrainian risks — a move to another city, a company that closes, days without power — can make even two incomes stop at once, which pushes the target up.

So "six months of income for everyone" is wrong twice: wrong base, and a number that ignores the actual risk.