Emergency fund: how much do you actually need?
An emergency fund isn’t saving. It’s insurance. It protects you from the inconveniences that will definitely come: broken heating, car repair, unexpected redundancy. Without it your savings disappear when life happens.
Why an emergency fund comes first
Most savings advice jumps straight to investing. But if you have no buffer and your car breaks down, you’re forced to sell funds at a bad time or take an expensive loan. Both are worse than having cash in a savings account.
The rule of thumb is 1 to 3 months’ salary. Single with stable employment and low fixed costs can manage with 1 month. Families with a mortgage, children and a car need closer to 3.
Calculate your emergency fund
Enter your monthly salary and choose how many months’ buffer you want.
Where should the buffer go?
The buffer should be accessible but not so accessible that you spend it. A savings account with no lock-in works well. Choose an account that:
- ✓You can withdraw from whenever, no lock-in periods
- ✓Earns interest. Don’t let the money sit in a current account at 0%
- ✓Is separate from your daily account. A different account makes it harder to touch
- ✓Is covered by the deposit guarantee, up to SEK 1 050 000 per bank per person
3 common emergency fund mistakes
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The buffer is too small
SEK 10 000 barely covers a car repair. Build it up step by step until you reach your target.
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The money sits in your current account
If the buffer is mixed with your daily spending money it’s likely to disappear without you noticing. Move it to a separate account.
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You invest the buffer
Shares and funds can lose 30 to 40% in value exactly when you need the money most. The buffer must be cash, not investments.
Savings accounts we like
Good savings accounts for your buffer
These accounts offer interest with no lock-in. Links are affiliate links.
Avanza
High-yield savings account with competitive interest, no lock-in and free deposits and withdrawals.
Open accountNordnet
Savings account with good interest and easy app management. Deposit-guaranteed.
Open accountCompricer
Compare savings account rates from all Swedish banks in one place.
Compare accountsThese links are affiliate links. We earn a small commission if you use the service, at no extra cost to you. Read our policy.
Next step
Once the buffer is done, then you invest
When you’ve reached your buffer target it’s time to put the rest of your savings to work harder. See our guide on next steps.
See next steps