How big a reserve needs to be
The usual answer is three months. The useful answer depends on something else entirely.
1Why the usual number is a guess
Three months of expenses is a reasonable starting point and a bad stopping point. It treats everyone the same, when the thing that actually varies is how predictable the next payment is.
2The question that sets the size
How long between the day income stops and the day it could plausibly restart. For someone on a monthly salary in a large firm, that gap is short. For someone paid per job, it can be a season.
- Salaried, stable employer: two to three months of fixed costs.
- Salaried, small employer or new role: four months.
- Paid per job or per season: six months, and treat the busy season as the time to rebuild it rather than to spend it.
3What the reserve is not
It is not an investment and it should not be judged as one. A reserve that earns nothing but is available the same day is doing its job. A reserve earning well but locked for a year is not a reserve, it is a different thing wearing the name.
If reaching it takes more than a day, it is savings. If it takes more than a week, it is an investment.
Last reviewed 2026-10-18.