Emergency fund
An emergency fund (ekonomisk buffert) is easily accessible cash for unexpected expenses or a drop in income. It is there so that a broken washing machine or a month without pay does not force you into expensive debt or to sell your investments. The buffer is the first financial priority, before you start investing in funds or shares.
How big?
A common rule of thumb is a few months of essential expenses, often about three to six months. Aim at what you must pay every month (housing, food, bills), not at your total spending. If your income is variable or you are self-employed the buffer should be bigger, because sickness benefit from Försäkringskassan only replaces around 80% of your SGI and is paid out after a waiting period.
Where to keep it
The buffer belongs in a savings account you can reach immediately, ideally one covered by the deposit insurance (insättningsgaranti). It should not be invested in shares or funds: the whole point is that the money is there when you need it, which is often exactly when the stock market is down. A little interest is a fair price for security and access.
Where it shows up
- Budget
- Financial health
- Flowchart
Build the buffer before investing. A-kassa and sickness benefit only replace part of your income and take time to pay out. The buffer covers the gap immediately.