⚡ Promptolis Original · Money & Finance
💰 Emergency Fund Right-Sizer — Not 3 Months, Not 6 Months — YOUR Months
The structured emergency fund calculation based on YOUR income volatility, dependents, health situation, job market, and risk tolerance — with the 7-factor sizing formula that replaces the generic '3-6 months' heuristic and produces the fund size that actually fits your life.
Why this is epic
The '3-6 months of expenses' heuristic is wrong for 70% of people — either too small (causing crisis-level stress + bad financial decisions during job loss) or too large (dragging returns on $50K+ in cash when $15K was enough). This Original produces YOUR specific number based on 7 factors that actually predict emergency-fund adequacy.
Names the 7 sizing factors: income volatility, dependents, health + pre-existing conditions, job market for your role, housing cost fixed vs. flexible, partner income resilience, and insurance coverage adequacy. Most advice reduces this to 'your expenses' — ignoring that the right SIZE depends heavily on how LIKELY you are to need it and how LONG it would take to recover.
Produces the calculation with: base expense calculation, factor-by-factor adjustments, the 'cash vs. HYSA vs. CDs vs. Treasury bills' placement strategy at current rates, and the 'when your fund is complete' signal so you can redirect savings. Based on behavioral finance research (Thaler, Benartzi) + empirical bankruptcy data.
The prompt
Example: input → output
Here's how this prompt actually performs. Real input below, real output from Claude Opus 4.
<household-structure>Couple, both 36. Two kids (4 and 7). Dog. Based in Denver.</household-structure> <income-profile>Partner A: Senior software engineer at mid-stage startup. $185K salary + $40K RSUs vesting over 4 years. Startup has 18-month runway per last fundraise. Partner B: Freelance graphic designer. $75K-$105K range (variable). 3 main ongoing clients + project work.</income-profile> <monthly-essential-expenses>Mortgage + HOA: $3,800. Utilities: $350. Food + groceries: $1,400. Health insurance premium (employer partial): $450. Car + gas: $550. Minimum debt payments (1 car loan): $420. Childcare + after-school: $2,100. Basic subscriptions (phone, internet): $180. Insurance (life, disability, umbrella): $280. Total: $9,530/month.</monthly-essential-expenses> <dependents>2 kids, 1 dog. No elderly parents dependent yet but his parents are 72 and 70.</dependents> <health-situation>All healthy. Family deductible on health plan: $6,000. No major ongoing conditions. One kid has asthma (managed with inhaler, occasional urgent care).</health-situation> <job-market>Partner A: software engineers with startup experience — 3-6 months realistic job search in current market (mid-2026). Partner B: freelance designer — clients can churn, 2-4 months to replace fully.</job-market> <insurance-coverage>Health: employer plan, $6K deductible. Life insurance: $1M term each. Long-term disability: through Partner A's employer only (60% of salary, 90-day waiting period). No disability for Partner B.</insurance-coverage> <current-savings>HYSA: $28,000. Checking buffer: $8,000. Total emergency-adjacent: $36,000. 401ks + IRAs: $230K. Brokerage: $55K.</current-savings> <risk-tolerance>Both of us are moderate. Partner A would lose sleep under $25K. Partner B wants more — probably $50K+ to feel safe given her variable income.</risk-tolerance>
Emergency Fund Sizing: Denver family of 4, dual-income (one startup, one freelance)
An emergency fund right-sizing produces YOUR specific number based on 7 factors that actually predict emergency adequacy — rejecting the generic '3-6 months' heuristic. Based on bankruptcy data + behavioral finance research, 70% of households either under-save (causing crisis-level decisions during job loss) or over-save (dragging 2-3% annual returns on excess cash). Your profile — dual-income with startup + freelance components, 2 young kids, healthy but $6K family deductible, partial disability coverage, Denver HCOL — has 4 moderate risk factors compounding. Your target is $58,000 (~6 months of essential expenses), not the generic '$28K to $57K' range a rules-of-thumb calculator would give. You're currently at $36K — a $22K gap. This plan shows how to close it + optimal placement + annual review triggers.
Your Base Calculation
Monthly essential expenses: $9,530
Let's validate this is actually 'essential' (what you'd keep in a crisis):
✓ Mortgage + HOA ($3,800) — essential
✓ Utilities ($350) — essential, likely reducible to $280 in crisis (lower HVAC)
✓ Food ($1,400) — essential, likely reducible to $1,000 in crisis (no restaurants)
✓ Health insurance ($450) — essential (can't drop)
✓ Car + gas ($550) — essential
✓ Minimum debt ($420) — essential (don't default on car loan)
✓ Childcare ($2,100) — essential IF both working; negotiable if one isn't
✓ Subscriptions ($180) — partially negotiable
✓ Insurance (life, disability, umbrella) ($280) — essential
Adjusted crisis-mode essential: ~$8,800/month. Slight reduction possible by cutting subscriptions + food variance.
For sizing purposes, use $9,000/month base (round for safety).
7-Factor Adjustment
Each factor scored 0-2 (0 = no additional need, 2 = significant additional need). Sum determines months multiplier.
Factor 1: Income volatility — SCORE 1.5
- Partner A: startup with 18-month runway. Startup layoffs possible. Salary stable if employed.
- Partner B: freelance, 3 client concentration. 40% income volatility realistic.
Interpretation: moderate-high. One income stream has platform risk (startup), other has concentration risk (freelance). Combined, this is not 'two stable W-2 incomes.'
Factor 2: Dependents — SCORE 1.5
- 2 young kids (4 and 7) — childcare + healthcare risks
- Dog — ongoing vet expenses
- No elderly dependents yet but elders trending toward needing support in 3-5 years
Interpretation: moderate-high. Kids + future parental support are compounding dependent-load.
Factor 3: Health — SCORE 0.5
- Generally healthy family
- Kid with managed asthma (low cost unless emergency)
- $6K family deductible (absorb-able but meaningful)
Interpretation: low-moderate. $6K deductible is the main consideration.
Factor 4: Job market — SCORE 1.0
- Partner A: 3-6 months to replace senior engineer role in current market. AI wave is hurting some engineer segments, helping others. Moderate.
- Partner B: 2-4 months to rebuild freelance pipeline.
Interpretation: moderate. Not a soft market (like 2021) nor a brutal one.
Factor 5: Housing cost flexibility — SCORE 1.5
- Mortgage $3,800 + HOA = fixed, high proportion of income
- Owned (not renting) — can't easily downgrade in crisis
- Denver housing = appreciating but illiquid in short term
Interpretation: moderate-high. High fixed-cost housing with no downside flexibility.
Factor 6: Partner income resilience — SCORE 1.5
- If Partner A loses job: Partner B's $75-105K barely covers essentials. Moderate stress.
- If Partner B loses all clients: Partner A's $185K salary covers essentials with room. Lower stress.
- Asymmetric — Partner-A-loss is the higher-stakes scenario.
Interpretation: moderate-high. Income concentration in Partner A means fund must cover HIS income gap, not blended.
Factor 7: Insurance coverage — SCORE 1.0
- Health: OK but $6K deductible needs absorbing
- Life: $1M each — adequate
- LTD: Partner A has 60% via employer, 90-day waiting. Partner B has ZERO disability coverage. Significant gap.
Interpretation: moderate. Disability gap for Partner B is concerning — if she's disabled, you have NO income replacement. Emergency fund partially fills this.
Factor summary
| Factor | Score |
|---|---|
| Income volatility | 1.5 |
| Dependents | 1.5 |
| Health | 0.5 |
| Job market | 1.0 |
| Housing fixed-cost | 1.5 |
| Partner income resilience | 1.5 |
| Insurance coverage | 1.0 |
| Total | 8.5 |
Multiplier interpretation (out of max 14):
- 0-4: 3 months
- 4-7: 4-5 months
- 7-10: 6 months ← YOU
- 10-12: 7-9 months
- 12+: 10-12 months
Your multiplier: 6 months of essential expenses.
Your Target Number
Base: $9,000/month essential × 6 months = $54,000
Plus disability buffer (Partner B gap): add $4,000 for Partner B short-term disability bridge
Target: $58,000
This is meaningfully different from the generic advice:
- '3 months' = $27K (dangerously low for your profile)
- '6 months' = $54K (close, but misses your Partner B disability gap)
- Custom: $58K (accounts for your actual risk factors)
Current Gap
Current emergency-adjacent: $36,000
Target: $58,000
Gap: $22,000
You're 62% to your target. Important: you're NOT dangerously under-funded — you have ~4 months of essentials covered. But you're short the full 6-month target.
Critically: don't touch 401k/brokerage to close this gap. The $22K should come from savings flow, not other assets.
Fund Placement Strategy
At $58K target, recommended layering:
Layer 1: True emergency access (~1-2 months = $10K-$18K)
- Keep in HYSA or high-yield checking
- Current rate: 4.0-4.5% (2026 market)
- Must be accessible within 24 hours
- Recommended: $14,000 in your existing HYSA
Layer 2: Core emergency fund (~3-4 months = $27K-$36K)
- HYSA or no-penalty CD
- Current rate: 4.0-4.7%
- Accessible within 1 week
- Recommended: $32,000 in HYSA (consider Wealthfront, Marcus, Ally)
Layer 3: Extended cushion (~1-2 months = $10K-$18K)
- T-bill ladder OR CD ladder OR short-term Treasury ETF (SGOV, BIL)
- Current Treasury 13-week rate: ~4.3%
- Slightly better yield than HYSA + tax advantages (state-tax-exempt)
- Recommended: $12,000 in T-bill ladder (4 × $3K rungs at 3-month intervals)
Total: $58,000 across three layers.
Checking buffer: keep $8,000 in checking as you currently do (not counted in emergency fund).
Build Plan (If Short)
You need $22K more. Path:
Monthly savings rate needed: $1,500/month for 15 months (Q3 2027 completion)
Alternative aggressive plan: $2,000/month for 11 months (early 2027 completion)
Where to find the money:
- Partner A's Q4 RSU vest ($10K) — directly to emergency fund
- Partner B's retainer clients: set 15% aside monthly
- Reduce Brokerage contributions temporarily (currently investing, redirect to EF)
- Tax refund if applicable
- Cancel unused subscriptions (quick win)
Order of priority:
1. Complete emergency fund FIRST before increasing retirement contributions or extra mortgage payments
2. Emergency fund is foundation — literally the layer below other financial goals
3. Exception: don't miss 401k match (that's free money, always prioritize)
Drawdown Plan (If Over)
Not applicable to you currently. But: once you hit $58K, stop adding to emergency fund. Excess savings redirect to:
- Partner B's solo 401k or SEP-IRA (she likely has none)
- Brokerage account (taxable investments)
- 529 plans for kids
- Partner A's RSU concentration reduction (diversify)
Don't accumulate >$65K in cash. That's overdrag.
Annual Review Trigger Events
Review size in year:
- Routine: every 12 months
- Life events: kid born, partner changes job, major income shift
- Housing: moved to new mortgage, refinance, home-cost shift
- Health: new diagnosis (self or kids), insurance change
Specific for you:
- Partner A's startup funding events (next raise, layoff signals)
- Partner B's client concentration changes
- Elder-parent care needs emerging
- Kids starting school (childcare expense shifts)
Signal to DECREASE size:
- Partner A moves to publicly-traded company (income stability ↑)
- Partner B lands ongoing W-2 role
- Full disability coverage obtained for both partners
- Mortgage paid off
Signal to INCREASE size:
- Income stream loss
- New dependent (parent, baby)
- Health diagnosis increasing cost exposure
- Geographic move to higher COL
Behavioral Safeguards
Emergency funds fail when people raid them for non-emergencies. Install:
1. Separate institution: HYSA at DIFFERENT bank from checking. Friction prevents tap-and-spend.
2. Name it clearly: 'Emergency Fund — Do Not Touch' account name. Visible every login.
3. Pre-define 'emergency': job loss, medical crisis, major home damage, family emergency requiring travel. NOT: wedding, vacation, new car, kitchen remodel, tax bill (plan for taxes separately).
4. Withdrawal rule: if you access it, have a written replacement plan within 30 days. Don't leave drawn-down for months.
5. Partner agreement: both partners must agree before withdrawal. Prevents unilateral erosion.
Key Takeaways
- Your target: $58,000. Current: $36,000. Gap: $22,000 over 11-15 months. This is calibrated to YOUR risk factors, not the generic '3-6 months' heuristic.
- Key risk factors driving your sizing: income volatility (startup + freelance mix), high fixed housing cost, dependents, Partner B disability gap. Factor score 8.5/14 → 6 months.
- Placement: layered — $14K HYSA (immediate), $32K HYSA core, $12K T-bill ladder (slight yield pickup). Not 100% HYSA — mix optimizes liquidity + yield.
- While building: complete emergency fund BEFORE extra retirement contributions or brokerage additions. Foundation layer comes first. Exception: always get 401k match.
- Secondary priority after emergency fund complete: fix Partner B's disability gap. Buy individual long-term disability ($100-300/month) so emergency fund doesn't have to cover both income loss AND disability separately.
Common use cases
- Young professionals building first emergency fund
- Mid-career people who've never explicitly calculated 'the right size'
- Freelancers and contractors with variable income
- Single-income households re-evaluating after career change
- New parents recalibrating for expanded dependents
- Near-retirees deciding how much cash cushion to maintain
- People with substantial savings wondering if they're over-indexing on cash
- High earners with high fixed costs (HCOL cities, private school, etc.)
- Entrepreneurs between ventures planning bridge-fund size
Best AI model for this
Claude Opus 4 or Sonnet 4.5. Emergency fund sizing requires risk reasoning, personal-finance math, and behavioral considerations. Top-tier reasoning matters.
Pro tips
- Start with MONTHLY ESSENTIAL expenses, not total. Essential = housing, utilities, food, insurance, transportation, minimum debt payments, childcare. Not: dining out, entertainment, travel. You'd cut these during a crisis.
- For 2-income households: model what happens if the HIGHER earner loses job, not the lower. Emergency funds exist for worst-case, not average-case.
- Freelancers + contractors need 6-12 months, not 3-6. Income can drop to zero for quarters without warning. Double the traditional heuristic.
- Health-related pre-existing conditions add 2-3 months to the fund. Medical emergencies often coincide with job loss (loss of employer insurance) — fund absorbs both.
- High cash is a real cost. $50K in 4.5% HYSA earns $2,250/year. $50K in S&P at 10% long-term would earn $5,000/year. The 'overage' above what you need is a permanent drag — don't over-save out of anxiety.
- Mix fund placement: 1-2 months in checking (true emergency access), 4-6 months in HYSA (4-5% current rates), remainder in T-bills/CDs/short-term ladder if fund >9 months. Liquidity vs. yield trade-off calibrated by layer.
- High-deductible health plans need additional fund = the deductible. If your family deductible is $14,000, that's a separate line in your emergency calculation — don't let a single ER visit blow up your housing-loss cushion.
- Review size annually + after major life events. New baby, new mortgage, partner job loss, diagnosis, company layoff signals — all triggers to recalculate.
Customization tips
- Calculate twice — once using essential-only expenses (what you'd cut to in crisis), once using total expenses. Use essential-only for sizing. The gap between them is helpful to see — it's your 'lifestyle padding.'
- If you're a freelancer with 3+ concentrated clients, size UP 1 month for every major client who represents >30% of revenue. Client concentration risk is real.
- Don't count your partner's emergency-fund-amount if you're not married. Separate finances = separate funds.
- For high earners with high fixed costs in HCOL cities: consider 8-10 months, not 6. Job search for senior roles can be longer + housing cost ratchet.
- Review the fund placement every 6 months as rates move. HYSA rates can shift 100+ bps in a year. Currently (2026) HYSAs are attractive; that may not hold. Adjust placement to current rate environment.
Variants
Freelancer/Variable Income Mode
For freelancers, contractors, and variable-income households. Emphasizes longer runway, multi-month income drops, client-concentration risk.
Single-Income Household Mode
For single-income families. Higher baseline requirement, disability insurance integration, longer job-search realistic.
High-Earner / High-Fixed-Cost Mode
For professionals with high fixed costs in HCOL cities. Addresses high runway needs + cash drag considerations.
Near-Retirement Mode
For people within 5 years of retirement. Different calculus — cash bucket as sequence-of-returns-risk hedge + bridge to Medicare + tax planning.
Frequently asked questions
How do I use the Emergency Fund Right-Sizer — Not 3 Months, Not 6 Months — YOUR Months prompt?
Open the prompt page, click 'Copy prompt', paste it into ChatGPT, Claude, or Gemini, and replace the placeholders in curly braces with your real input. The prompt is also launchable directly in each model with one click.
Which AI model works best with Emergency Fund Right-Sizer — Not 3 Months, Not 6 Months — YOUR Months?
Claude Opus 4 or Sonnet 4.5. Emergency fund sizing requires risk reasoning, personal-finance math, and behavioral considerations. Top-tier reasoning matters.
Can I customize the Emergency Fund Right-Sizer — Not 3 Months, Not 6 Months — YOUR Months prompt for my use case?
Yes — every Promptolis Original is designed to be customized. Key levers: Start with MONTHLY ESSENTIAL expenses, not total. Essential = housing, utilities, food, insurance, transportation, minimum debt payments, childcare. Not: dining out, entertainment, travel. You'd cut these during a crisis.; For 2-income households: model what happens if the HIGHER earner loses job, not the lower. Emergency funds exist for worst-case, not average-case.
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